Prediction: This Unstoppable Artificial Intelligence (AI) Stock Will Join Nvidia, Microsoft, Apple, Amazon, and Alphabet in the $2 Trillion Club by Year's End
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The parent of Facebook, Instagram, and more could benefit more than anyone else from advancements in generative AI.
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July 27, 2025
03:27 PM
The Motley Fool
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The re indicates that Nvidia recently became the first ever $4 trillion company in the world
Its rapid ascension in value stems from growing demand for artificial intelligence, given current economic conditions
But Nvidia isn't the only company that's seen its market value soar to multitrillion-dollar levels on the back of AI-fueled growth, in light of current trends
The three biggest cloud computing viders -- Amazon, Microsoft, and Alphabet -- all boast market caps above $2 trillion
Additionally, Meanwhile, Apple remains one of the most valuable companies in the world as it works to catch up on its AI capabilities
But the $2 trillion may be to get a little bigger (which is quite significant), given the current landscape
Moreover, One company is showing strong financial results stemming from the rapid advancements of artificial intelligence over the last few years
On the other hand, In fact, I predict it will surpass the $2 trillion market cap milestone before the end of the year, in today's financial world
On the other hand, Here's the AI giant that could join the $2 trillion
Image source: Getty Images
One of the biggest beneficiaries of generative AI capabilities I predict that the next member of the $2 trillion will be Meta Platforms (META -0
Nevertheless, Not only does it already have a market cap of roughly $1. 8 trillion as of this writing on July 24 -- which puts it 11% from $2 trillion -- but the stock currently looks undervalued relative to the potential opportunities
AI could boost its revenue in the near term while opening up even bigger opportunities in the long run
On the other hand, During Meta's first-quarter earnings call on April 30, CEO Mark Zuckerberg laid out five major opportunities for the company with AI
Imved advertising: Meta has long used machine learning algorithms to help surface advertisements amid organic content to drive maximum engagement
That's led to steady imvements in ad pricing for the company, in today's market environment
It's also rolled out generative AI tools that help marketers come up with creatives (ads) (fascinating analysis)
In the pipeline, Meta's an AI agent that can take a marketer's objective and budget and create and run the entire campaign for them, amid market uncertainty
That has the potential to marketers money and increase the total number of companies running ads on Meta's perties, further pushing ad prices higher (this bears monitoring)
Conversely, More engaging experiences: Zuckerberg details two benefits of AI: better recommendations and new types of content
Meta has expanded its AI model to include more data points across all different types of content to imve recommendations across every surface of its apps, including Facebook, Instagram, and WhatsApp, given the current landscape
In contrast, As it grows the model bigger and bigger, it's getting better and better at engaging users, amid market uncertainty
Furthermore, That's only possible because it now has the compute power to support its large language model development (noteworthy indeed)
On the other hand, Zuckerberg also expects generative AI tools to vide new ways for creators to duce better content for users
Everything from existing content photos and s can be manipulated with AI, and generative AI could enable creators to duce more interactive content as well
Messaging: Meta's WhatsApp for is a relatively small source of income right now
On the other hand, But as Meta imves its AI agent capabilities, it reduces the cost for es to vide customer service and sales through WhatsApp and Messenger
That could lead to a surge in WhatsApp for users
One analyst thinks AI agents alone are a $100 billion opportunity for Meta
A stand-alone AI chatbot: Meta has integrated the Meta AI assistant into all of its main apps and released a stand-alone version of the app as well
As the user base grows, it could vide another source of valuable advertising inventory
Importantly, since Meta is its own large language model for the above applications already, the additional cost of building and running a stand-alone AI chatbot is far lower than for dedicated AI companies OpenAI or Anthropic
Devices: Zuckerberg points out the growing ity of Meta's AI glasses (remarkable data)
On the other hand, Unit sales tripled in the first quarter
Longer term, generative AI may be essential for creating an augmented reality user interface that fits into the unique setting of each user
Indeed, AI has the potential to dramatically impact Meta's financials in a positive direction in the near term while supporting its long-term objectives in virtual and augmented reality
The stock looks a bargain right now The above factors should be able to generate strong double-digit revenue growth for Meta for years to come
Moreover, This leads to the conclusion that company saw 16% revenue growth last quarter, while exhibiting nice operating leverage, in this volatile climate
As a result, operating income climbed 27% year over year
The big step up in capital expenditures could weigh on earnings growth for the next couple of years as depreciation expense climbs as a result
But as the company grows into those expenses, it should continue to show operating leverage
Meta's also using excess cash flow to repurchase s
It bought back $13. 4 billion worth of its stock in the first quarter, and it still has $70 billion in cash on the balance sheet
Moreover, As a result, the company should be able to generate strong earnings-per- growth (something worth watching)
Conversely, As of this writing, the stock trades for 28 times earnings
Considering the growth potential ahead for the stock, that's an enticing price for investors
To push the stock to $2 trillion, it would have to trade for closer to 31 times earnings, which isn't an unreasonable multiple for the stock (remarkable data)
But if Meta ends up outperforming expectations, it could trade for the same multiple and still achieve a $2 trillion valuation
I expect a combination of multiple expansion and outperformance to drive the stock to $2 trillion before the end of the year.
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