Jim Cramer Continues To Defend Meta Platforms (META)’s AI Spending

We recently published 13 Stocks That Crossed Jim Cramer’s Radar. Meta Platforms, Inc. (NASDAQ:META) is one of the stocks Jim Cramer discussed.

After Meta Platforms, Inc. (NASDAQ:META)’s latest earnings report created worries about aggressive spending. Cramer took the contrarian view and stressed that the firm is defending itself from a possible encroachment by OpenAI on its moat in the social media industry. Throughout the year, the CNBC TV host has found different reasons to be positive about the firm. Yet, Cramer hasn’t held back from pointing out what he believes are weaknesses. For instance, in January, he remarked that Meta Platforms, Inc. (NASDAQ:META)’s AI platform was a “little more prurient.” Yet, Cramer has also continued to praise the firm’s smart glasses. In this appearance, he reiterated his recent reasons to have faith in the firm. These include what Cramer views as defensive spending against OpenAI and the firm’s CEO, Mark Zuckerberg:

Photo by Timothy Hales Bennett on Unsplash

“The second one, that I think is down a lot, Meta, actually has to spend because it’s worried about OpenAI coming into it.

“I think that Meta’s down most severely because they were the ones who said they were going to spend the most but Meta does not want OpenAI coming into social. .

“[After David Faber wondered what Meta was spending the money on given that they don’t have a cloud provider and if that was all being spent to enhance advertising] I think so, I think that you, they’re the number, well obviously you can go to Google for advertising, you can go to Amazon for advertising, or you send them a check.

“You’re being asked to have faith in a person, Zuckerberg, and, you know what, gotta tell you Carl, I’ve had worst faith. This man I think is great at what he does, I think he owns big consumer advertising, he could own a lot of different kind of advertising, a lot of optionality, it’s the one that I think OpenAI could kamikaze, that’s the problem. They can’t kamikaze Microsoft.

“[When Carl Quintanilla asked him what would he tell viewers who ask about the metaverse] Well the metaverse may have been ill-advised. . . he is a risk taker, Zuckerberg, and I like that. . .do I trust him? So far in my life I have, I did not recommend a stock when it first came public cause he did not have a strategy for this. . .did he come up with something that dominates this? Yes, so I am taking a leap of faith maybe, a leap of faith.

“The real crime would be, if Meta, didn’t spend the money, and we say, remember Meta?”

While we acknowledge the potential of META as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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