Meta's Heavy Investments in AI, Metaverse Could Payoff Big Time ...
Meta Platforms stock is sinking again as investors wonder how long it will take for growth-fueled spending to enjoy that big payoff. Even if the biggest gains from AI and the Metaverse are years away, the stock looks worth pursuing here. 
Investment in Emerging Technologies
Shares of AI-empowered social media and metaverse innovator Meta Platforms (NASDAQ:META) slipped sharply after the company reported its first-quarter numbers, which were actually pretty good. Its earnings per share (EPS) came in at $4.71, well above the $4.32 consensus estimate.
As Meta continues investing heavily in the emerging technologies it truly believes in, most notably AI and the Metaverse, the risks stand to climb. But so, too, do the potential long-term rewards. Perhaps adopting more of an “open” approach to the Metaverse and AI could help mitigate some of the risks. 
Future Potential and Risks
Undoubtedly, expenditures for its artificial intelligence (AI) and metaverse ambitions are not going to come cheap. The AI and metaverse efforts will cost tens of billions (if not more) to build up before the real profits can finally come raining down. Indeed, the Metaverse may be viewed as the riskier of the two endeavors, especially with AI already helping propel some of its recent quarterly results. 
In my opinion, advanced generative AI actually seems to be a natural accelerator to building a truly next-generation type of metaverse or virtual-reality experience. If Meta can create a powerful (but safe) text-to-3D model or world AI model, its AI expenditures will help reduce a great deal of the future metaverse bills.
Long-Term Outlook
For longer-term investors who will be around long enough (let’s say three to five years) for Meta’s spending to begin really kicking in, I view Meta stock as incredibly undervalued right here at just 23.7 times forward price-to-earnings (P/E). Meta is betting big on AI and the Metaverse, even if it takes a few more years to supercharge revenue and profits.
Zuckerberg has always played the long-term game, and as he looks to open the doors to remarkable frontiers, I’d only suggest loading up on META stock if you seek high growth, are comfortable with Zuckerberg’s aggression, and plan to stay invested for at least a few years.
On TipRanks, META stock comes in as a Strong Buy. Out of 43 analyst ratings, there are 39 Buys, three Holds, and one Sell recommendations. The average META stock price target is $530.93, implying upside potential of 12.3%.
