We recently published 10 Trend Stocks to Watch as Brad Gerstner Explains Tailwinds for AI Trading: ’10x Manhattan Project’. Meta Platforms Inc (NASDAQ:META) is one of the trending stocks to watch.
James Van Geelen, founder and portfolio manager at Citrini Research, was asked during a podcast on Bloomberg why Meta Platforms Inc (NASDAQ:META) had to sign a deal with CoreWeave when it has significant data center capacity. This is what the analyst said.
“Basically, I would say anything you can do to divert that CapEx away from yourself. Well, a lot of these things are funded with Cashflow and yes, we’re starting to see debt financing take its place. But if you’re running a company that’s been around for a while and is one of the largest companies in the world, and yes, you could justify taking on an inordinate amount of risk to do this. But like anyone else, if you have a goal and you can somehow push him away. some of that risk, because if, you know, if Core goes bankrupt, Meta Platforms Inc (NASDAQ:META) no, it’s not, it’s not the worst thing in the world for Meta.”
CoreWeave recently signed a $14 billion deal with Meta Platforms Inc (NASDAQ:META) to supply computing power capacity to the Zuckerberg-led giant.
Photo by Campaign Creators on Unsplash With daily active users of approximately 3.48 billion, Meta’s big advantage in the AI race is the data and user base it has access to, which is extremely useful for ad targeting and monetization. In 2024, digital advertising accounted for approximately 98% of the company’s total revenue. Business is booming for now. In the June quarter, price per ad increased 9% year-over-year, reflecting higher returns for advertisers and a favorable supply-demand balance for Meta. However, a general slowdown in digital advertising and huge spending by the company could limit the stock’s upside. Between 2014 and 2019, digital advertising increased about 20% annually, but growth is now expected to slow to 9% annually from 2025 to 2030. Meta is expected to spend between $60 billion and $65 billion in 2025 on capital expenditures to expand its artificial intelligence infrastructure. Unlike hardware chip makers like Nvidia, which make money selling AI chips, companies like Meta would need to show real results from their AI spending to unlock more value for shareholders in the near term.
Alger Spectra Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2025 Investor Letter:
“MetaPlataformas, Inc. (NASDAQ:META) is the world’s largest social media company, spanning Facebook, Instagram, WhatsApp and Messenger, and its Reality Labs division is pursuing next-generation virtual and augmented reality hardware. Its family of apps averaged 3.4 billion daily active users in March 2025, highlighting the unparalleled scale underpinning its advertising franchise. The company’s AI-powered ad delivery tools are driving higher prices and better campaign performance, while new initiatives, such as launching ads on WhatsApp, have the potential to unlock new revenue streams and are backed by a cash-rich balance sheet that now includes a quarterly dividend. Shares rose during the quarter after fiscal first-quarter results came in better than expected due to strong revenue growth and operating margin expansion. Additionally, management guided fiscal second-quarter revenue above consensus and cut full-year spending guidance, even as it lifted capital spending plans to accelerate AI infrastructure development.”