Key Points
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Meta Platforms has over 3.5 billion daily active users across its social media platforms, which power its successful advertising business.
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The company’s AI infrastructure spending worried Wall Street, but it still posted healthy 40% operating margins in its most recent earnings report.
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It’s currently the cheapest Magnificent Seven stock by forward P/E ratio.
With so many companies using artificial intelligence (AI), there’s no shortage of AI stocks available to investors.
Meta Platforms (NASDAQ: META) is an AI company that I’ve been loading up on, and I plan to hold it forever. Here’s why.
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Two people taking a selfie with a dog.
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An excellent company at a reasonable valuation
Meta has a massive user base, with an average of 3.54 billion family daily active people (DAP) as of September 2025. DAP is Meta’s metric that tracks the number of unique people who use at least one of its platforms, which includes Facebook, Instagram, Messenger, and WhatsApp.
That user base drives the social media company’s wildly profitable ads business. Meta reported $51.2 billion in revenue in Q3 2025, with 98% coming from ads. Because Meta generates so much cash flow, it can afford to invest heavily in AI infrastructure. Even with its capital expenditures, its operating margins are still fairly high at 40%.
Meta’s stock dropped significantly after its third-quarter earnings report, when it announced capital expenditures would be notably larger in 2026, and has been up and down since then. The current share price, to me, is a good opportunity to buy the dip on a strong business.
Meta is trading at 20 times forward earnings as of Jan. 21, which is well below the rest of the Magnificent Seven. For comparison, the second-cheapest club member by that metric, Microsoft, trades at 27 times forward earnings. Given how many AI stocks carry expensive valuations nowadays, Meta looks like a bargain.
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Lyle Daly has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.