Meta Platforms: A Smart AI Stock to Buy During the Sell-Off
The current stock market sell-off has significantly impacted artificial intelligence (AI) stocks, with many leading companies experiencing drops of over 25%. The uncertainty surrounding tariffs and potential recession has made investors cautious about tech companies’ heavy investments in AI infrastructure. However, this uncertainty also presents an opportunity to invest in strong companies with clear competitive advantages.
Meta Platforms (META 4.30%) is one such company that stands out as a stock to buy, currently sitting 29% below its all-time high. Here’s why investors should consider adding it to their portfolio.
Meta’s Artificial Intelligence Advantage
Meta is among the few “hyperscalers” building massive data centers focused on expanding compute power for AI training and inference. Unlike other hyperscalers, Meta doesn’t operate a public cloud platform, which means it doesn’t have to worry about cloud customers changing their spending habits. This allows Meta to focus on long-term goals and ensure high utilization rates for its capital investments.
While Meta’s main revenue source is advertising, which could be impacted by an economic slowdown, the company has historically proven more resilient than other advertising channels. Its broad audience and ability to target specific groups make its advertising platform incredibly valuable.
The Massive Potential of AI for Meta
Meta has been working on AI algorithms for over a decade and has recently made significant advancements. The introduction of Reels led to a rework of its recommendation algorithm, resulting in increased engagement and more relevant ads. Meta’s AI spending has also enabled the development of Advantage+ campaigns, which optimize ad creatives for specific marketing goals. Four million advertisers were using this feature as of January, and it’s expected to scale quickly.
Meta is also working on its AI chatbot, Meta AI, which has already reached 700 million users. The goal is to develop it into a 1 billion-user product, potentially generating revenue through personalized features and click-to-message ads. Additionally, Meta is creating AI agents for businesses within Messenger and WhatsApp, which could help with customer service and sales.
Take Advantage of the Sell-Off to Buy the Stock at a Bargain
Despite some risks associated with an economic slowdown, Meta’s position in the advertising market and growth opportunities mitigate these risks. The stock is currently trading at a price-to-earnings ratio of less than 22, well below its average valuation. Analysts are concerned about AI spending impacting profits, but Meta’s share repurchase program and expected growth in 2026 should help drive positive earnings-per-share growth.
Investors with a long-term outlook should consider buying Meta Platforms now, as the stock trades well below its all-time high. With its strong AI capabilities and potential for growth, Meta is an attractive investment opportunity during the current sell-off.
