We just covered Avoid SpaceX and Buy These 11 Stocks Instead. Meta Platforms (NASDAQ:META) ranks #2 (see Avoid SpaceX and Buy These 5 Stocks Instead).
Number of Hedge Fund Investors: 262
Meta Platforms (NASDAQ:META) is down about 17% so far this year amid fears that Mark Zuckerberg’s AI spending spree might not result in returns. But many believe AI is already showing a positive impact on the social media giant’s finances and Zuck knows what he’s doing.
An AI-driven advertising revolution drives META bull thesis. Meta’s Advantage+ suite, which is Meta Platforms’ (NASDAQ:META) proprietary platform for automating ad targeting and placement, has become the dominant automation tool in the industry. Eighty-two percent of Meta advertisers are now using some component of it. Management noted that Advantage+ increases ad impressions by 19 percent year over year while driving a 12 percent increase in cost per ad, indicating that advertisers are willing to pay more because their returns are improving. Advantage+ is essentially Meta using artificial intelligence to boost and optimize the performance of ads for advertisers across its platforms.
Meta GEM is Meta Platforms’ (NASDAQ:META) back-end learning model designed for ad-ranking that analyzes image, text, and video assets to predict who wants to see what content and when. It builds user profiles of shopping behavior and purchase intent, then furnishes the most relevant ads to each customer based on those inferred preferences. According to Meta’s internal assessment, GEM is four times more efficient at translating compute power into direct advertising performance compared to traditional ad-ranking systems.
Meta Platforms (NASDAQ:META) is starting to eat into Google’s advertising market share at a meaningful pace. eMarketer data shows that Google’s share of the global digital advertising market has fallen from 34 percent in 2021 to 26.4 percent in 2026. Meta’s share, on the other hand, has jumped from 22 percent in 2021 to 26.8 percent in 2026, meaning Meta Platforms (NASDAQ:META) is projected to unseat Google as the leading digital advertising platform for the first time this year.
Madison Large Cap Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q1 2026 investor letter:
“During the quarter, we initiated positions in Meta Platforms, Inc. (NASDAQ:META) and Salesforce.com. The second new investment was in Meta Platforms, which owns three dominant, global social network and communications apps in Facebook, Instagram, and WhatsApp. We believe revenue growth will remain strong as its user count grows and monetization of its apps improves. Meta is investing heavily in AI and seeing real benefits in the personalization and efficacy of ads in its social network. Additionally, WhatsApp is finally …(Click Here to Read the Letter in Detail).”
Photo by Timothy Hales Bennett on Unsplash
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 the cheapest AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
Disclosure: None. Follow Insider Monkey on Google News.
Hedge Fund Resource Center