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Analyst Explains Why Meta Platforms (META) Signed Data Center Deal With Coreweave

We recently published 10 Trending Stocks to Watch as Brad Gerstner Explains Tailwinds for AI Trade – ’10x Manhattan Project’. Meta Platforms Inc (NASDAQ:META) is one of the trending stocks to watch.

James Van Geelen, the founder and portfolio manager at Citrini Research, was asked during a podcast on Bloomberg why Meta Platforms Inc (NASDAQ:META) had to sign a deal with CoreWeave when it has significant data center capacity. Here is what the analyst said

“It’s basically, I would say anything you can do to shift that CapEx away from yourself Okay. A lot of this stuff is funded from Cashflow and yeah, we’re starting to see debt financing take its place. But if you arerunning a company that’s existed for a while and is one of the biggest companies in the world, and yes, you could justify taking anor inordinate amount, amounts of risk to do this. But just like anyone else, if you have a goal and you can kind of shift away some of that risk to, ’cause if, you know, if Core weve goes bankrupt Meta Platforms Inc (NASDAQ:META) not, it’s not, it’s not the worst thing in the world for Meta.”

CoreWeave recently signed a $14 billion agreement with Meta Platforms Inc (NASDAQ:META) to supply the Zuckerberg-led giant with computing power capacity.

With daily active users of about 3.48 billion, Meta’s huge edge in the AI race is the data and user base it has access to, which is extremely useful for ads targeting and monetization.

In 2024, digital advertising accounted for about 98% of the company’s total revenue. The business is thriving for now. In the June quarter, price per ad rose 9% year over year, reflecting higher returns for advertisers and a favorable supply and demand balance for Meta.

However, an overall slowdown in digital advertising and huge spending from the company could limit the stock’s upside. Between 2014 and 2019, digital advertising rose about 20% annually, but growth is now expected to slow to 9% per year from 2025 through 2030.

Meta is expected to spend about $60 billion to $65 billion in 2025 on capital expenditures to expand its artificial intelligence infrastructure. Unlike hardware chip makers like Nvidia, which make money by selling AI chips, companies like Meta would need to show actual results from their AI spending to unlock more shareholder value in the short term.

Alger Spectra Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its second quarter 2025 investor letter:

“Meta Platforms, Inc. (NASDAQ:META) is the world’s largest social-media company, spanning Facebook, Instagram, WhatsApp and Messenger, and its Reality Labs arm pursues next-generation augmented- and virtual-reality hardware. Its Family of Apps averaged 3.4 billion daily active users in March 2025, highlighting the unrivalled scale that underpins its advertising franchise. The company’s AI powered ad-delivery tools are driving higher pricing and better campaign performance, while new initiatives—such as the rollout of ads in WhatsApp—have the potential to unlock fresh revenue streams and are supported by a cash-rich balance-sheet that now includes a quarterly dividend. Shares rose during the quarter after fiscal first-quarter results came in better-than-expected due to strong revenue growth and operating margin expansion. Additionally, management guided fiscal second-quarter revenue above consensus and trimmed full-year expense guidance even as it lifted capital-expenditure plans to accelerate AI-infrastructure build-out.”

While we acknowledge the risk and potential of META as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than META and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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