In a landscape where digital advertising flows like a river, **Meta Platforms, Inc. (NASDAQ:META)** stands as a towering tree, unyielding even in turbulent times. Amidst a slew of discussions about **AI demand** and overall market dynamics, we’re diving into why Meta continues to be heralded as a leader in the advertising space, particularly in the context of potential challenges ahead.
The Current Market Landscape for Meta Platforms
As we navigate through the high-stakes tech sector, recent quarterly results from key players have instilled a sense of optimism. Notably, **Storm Uru**, a manager at Liontrust Global Dividend Fund, highlighted the monumental growth attributed to AI, stating on CNBC, “**50% of that growth came from AI revenue, a vital marker for future projections**.” This surge has alleviated the market’s initial anxiety post-DeepSeek launch.
Persistent Demand for AI
David Grain, Founder & CEO of Grain Management, emphasized in a CNBC interview that “**the advent of AI has ignited an explosion in demand for data centers and computing power**.” This burgeoning demand reinforces the notion that technology and advertising are closely intertwined, bolstering firms like Meta.
Why Hedge Funds are Watching Meta
With a remarkable **235 hedge fund investors**, Meta’s stock is capturing significant attention. Investors are leaning into stocks with proven performance, and Meta is no exception. Mark Mahaney from Evercore ISI put it succinctly: “**At less than 20 times earnings, it’s nicely dislocated and positioned to outperform.**” He adds that concerns surrounding Meta’s dependency on Chinese markets are somewhat unfounded, as these companies still seek to engage with audiences in Europe and Latin America through Meta’s platforms.
“The **resilience of Meta’s model may be underappreciated**,” Mahaney articulated. “The worse things get between the US and China, the less chance TikTok has of maintaining its foothold in the US, thereby channeling more ad spend back to Meta.”
Impressive User Growth
One of Meta’s most significant assets is its **massive user base**, which continues to expand. As of March, the company reported a staggering **3.43 billion monthly active users**, reflecting a **6% growth year-over-year**. This user base not only amplifies monetization opportunities but also enhances data processing capabilities, positioning Meta as a digital powerhouse.
Robust Advertising Revenue
In an advertising ecosystem where **98% of its revenue** is generated from ads, Meta’s growth rate of **21% YoY** is noteworthy. To put this in perspective: **Google Search** witnessed a **9% growth**, while **YouTube** limped behind at **11%**. Such statistics emphasize Meta’s formidable position in the market.
Wall Street’s Predictions
Considering Meta’s current trajectory, Wall Street’s estimates of **21% EBIT growth** and **18% OCF growth** could potentially underestimate the tailwinds driving the company forward.
According to **Nightview Capital**, Meta’s platforms—**Instagram, Facebook, WhatsApp,** and **Messenger**—reach nearly half the global population daily, creating a robust advertising ecosystem. With investments in **AI** and **augmented reality (AR)**, they envision substantial growth opportunities ahead.
Conclusion: A Bright Future for Meta
Ultimately, Meta ranks 1st among the top buzzing stocks in May. While there are alternative AI stocks that promise higher short-term returns, Meta’s established presence and ongoing innovations maintain its appeal.
If you’re scouting for promising AI stocks trading at less than 5 times their earnings, consider checking our reports that detail potential up-and-coming investments.
READ NEXT: Explore our lists of the 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
