"While it had a strong 2025 heading into Q3 earnings (up about 30%), it has since lost all those gains. It's only up around 7% for the year, thanks to a poorly received Q3 earnings report. In reality, the report wasn't bad at all. However, investors didn't appreciate Meta's spending plans, which caused the stock to tumble following earnings. However, this could be an opportunity to buy one of the top artificial intelligence (AI) stock picks on the market."
"Meta believes that AI can improve its ad conversion rate, which it has already seen fairly strong success in doing. In Q3, its AI recommendations led to 5% more time being spent on Facebook and 10% more on Threads (its X competitor). Furthermore, it believes that AI can make a huge difference in its business operations. At least so far, those investments seem to be working out."
Meta Platforms remains a major ad-driven social media company operating Facebook, Instagram, and Threads. Q3 revenue rose 26% year over year to $51.2 billion, well above the prior expectation of $48.75 billion, and management guided Q4 growth around 19% at midpoint. AI-driven recommendations increased user time by roughly 5% on Facebook and 10% on Threads, and management expects AI to boost ad conversion and operational efficiency. Investors reacted negatively to aggressive AI-related spending plans and capital expenditure outlook, triggering a post-earnings stock sell-off that some view as a potential buying opportunity.
Read at The Motley Fool
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