Currently, 10 companies traded on U.S. stock exchanges have market values that exceed $1 trillion. They are listed below in descending order based on the upside (or downside) implied by Wall Street’s median target price.

• Meta Platforms (META 0.09%) has a median target price of $850 per share, implying 40% upside from the current share price of $608.
• Microsoft has a median target price of $630 per share, implying 26% upside from the current share price of $503.
• Amazon has a median target of $300 per share, implying 26% upside from the current share price of $238.
• Taiwan Semiconductor has a median target of $355 per share, implying 26% upside from its current share price of $282.
• Nvidia has a median target of $229 per share, implying 23% upside from its current share price of $187.
• Alphabet has a median target of $330 per share, implying 18% upside from the current share price of $279.
• Broadcom has a median target of $400 per share, implying 18% upside from the current share price of $340.
• Tesla has a median target of $459 per share, implying 14% downside from the current share price of $402.
• Apple has a median target of $300 per share, implying 10% upside from the current share price of $273.
• Berkshire Hathaway has a median target of $481 per share, implying 6% downside from the current share price of $513.

The forecasts above suggest Meta Platforms is the best trillion-dollar stock to buy now. Read on to learn more.

Image source: Getty Images.

Meta is leaning on artificial intelligence to improve its advertising business

Meta Platforms is the second-largest ad tech company in the world. It has a key competitive advantage in owning three of the four most popular social media platforms as measured by monthly active users. More than 3.5 billion people engage daily with Facebook, Instagram, or WhatsApp, which makes Meta Platforms a key advertising partner for countless brands.

Meta is further strengthening its value proposition with artificial intelligence (AI) tools. The company has developed machine learning models that retrieve and rank ads based on user preferences. Meta has also introduced generative AI tools that help marketers create and personalize ads based on their intended audience. Those product development efforts are paying off.

On the latest earnings call, CEO Mark Zuckerberg said, “Our AI recommendation systems are delivering higher quality and more relevant content.” Time spent on Facebook increased 5%, time spent on Threads increased 10%, and video engagement on Instagram increased 30%. Also, conversion rates are trending higher, meaning users are clicking ads more frequently. In turn, the average price per ad increased 10%, meaning brands are willing to pay more to reach users.

Beyond innovations in AI, Meta recently introduced ads in Threads and WhatsApp. “We have exciting ad supply opportunities on both Threads and WhatsApp,” said CFO Susan Li. “Within WhatsApp Status, we’re continuing to gradually introduce ads and expect to complete the rollout next year.”

Grand View Research estimates ad tech spending will increase at 14% annually through 2030. That means Meta should have no trouble achieving double-digit earnings growth for the foreseeable future. But the company also has an opportunity in smart glasses.

Meta’s nascent smart glasses businesses could become a material source of revenue

Meta makes smart glasses that combine its conversational assistant Meta AI with Ray-Ban or Oakley frames. Beyond AI capabilities, the glasses feature speakers and a built-in camera that lets users capture images and video. Smart glasses are a mere $2 billion market, but that figure will quadruple by 2030, and Meta dominates the space with 73% market share.

Importantly, the company recently introduced its first pair of augmented reality (AR) smart glasses, called Ray-Ban Meta Display. They feature an in-lens display that overlays the real world with a full-color hologram. While the AR glasses currently come with Meta AI, the company hopes to incorporate a superintelligence system in the future.

Smart glasses may seem like a clunky accessory, but CEO Mark Zuckerberg says they will eventually replace smartphones to some degree, in much the same way smartphones have replaced computers. “Personal devices likes glasses that understand our context because they can see what we see, hear what we hear, and interact with us throughout the day will become our primary computing devices.”

If Zuckerberg is correct, the AR smart glasses market could eventually be worth hundreds of billions of dollars. And Meta Platforms, as the current market leader, could become the next consumer electronics juggernaut akin to what Apple achieved in the last 15 years with the invention of the iPhone.

Meta Platforms

Today’s Change

(-0.09%) $-0.57

Current Price

$609.32

Meta stock crashed after its latest earnings report, creating a buying opportunity

Meta reported strong third-quarter financial results. Revenue increased 26% to $51 billion and generally accepted accounting principles (GAAP) net income (excluding a one-time tax charge) increased 20% to $7.25 per diluted share. Yet, shares fell sharply after the report because Meta plans to spend even more on AI product development next year. The stock is currently 23% below its high.

I think the sell-off was an overreaction. Yes, the company is spending heavily on AI, but those investments have clearly benefited its advertising business. And Meta’s long-term aspiration of creating a superintelligence system (which could be monetized with smart glasses) could establish the company as a consumer electronics powerhouse.

Regardless, Wall Street expects Meta’s earnings to increase at 15% annually over the next three years. That makes the current valuation of 27 time earnings look quite reasonable. Investors should feel comfortable buying a small position in this stock today.