The Fool’s Take

Social media giant Meta Platforms has been using artificial intelligence technology to carve out greater efficiencies and increase its competitive advantage. It’s spending so much on AI, though, that some investors balked at its third-quarter earnings report, sending the stock down.

But its results were not bad at all. Revenue rose 26% year over year to $51.2 billion. Meta’s base of daily active users on Facebook, Instagram, WhatsApp, Messenger and Threads rose 8% to 3.54 billion people. However, operating expenses climbed 32% to $30.7 billion. Meta has spent heavily on employees with AI skills and on building out AI data centers.

But the company is already reaping the benefits of its previous investments. CEO Mark Zuckerberg noted, “our AI recommendation systems are delivering higher quality and more relevant content, which led to 5% more time spent on Facebook in Q3 and 10% on Threads.”

Given the massive opportunity represented by AI and Meta’s ability to capitalize on its AI spending, its recent stock price decline represents a buying opportunity for long-term believers. The stock seems attractively valued, with a recent forward-looking price-to-earnings (P/E) ratio of 22.5. (The Motley Fool owns shares of and recommends Meta Platforms.)

Ask The Fool

From N.C., Cleveland, Ohio: What happens if I can’t pay my taxes this year?

First, understand filing your tax return and paying your taxes are different things. Regardless of your ability to pay, you still need to file your return on time. There are penalties both for failing to file and failing to pay, and in the first months, the failure to file penalty is larger. So file on time and pay as much as you can to minimize penalties and/or interest charges.

If you can’t pay in full on time, you may be able to set up a short-term or long-term payment plan at IRS.gov/paymentplan. If that doesn’t work, you can also request an installment agreement by submitting Form 9465, Installment Agreement Request, with the IRS.

Another possibility is an “offer in compromise,” where the IRS accepts less than the full amount you owe. These are decided on a case-by-case basis, considering each taxpayer’s circumstances. A bank loan is a possibility, too, and one that might cost less than you’d pay in IRS interest and penalties.

You can also try calling the IRS at 800-829-1040 to discuss your situation and find out about your options. But note that like much of the U.S. government, the agency has undergone staffing reductions, with more potentially on the way. This can make it harder to reach its customer service representatives. The lengthy federal government shutdown also limited IRS operations.

From P.F., Portland, Ore.: What’s collateral?

Collateral is property or assets used to “secure” a loan. With a mortgage, for example, the home itself is the collateral, and you can lose it if you default on the loan. Some debt, such as credit-card debt, is “unsecured.”

The Fool’s School

Many people do all their stock investing through workplace-sponsored retirement accounts such as 401(k)s. If you’d like to sock away even more, though, consider setting up an account at a brokerage, which will let you invest in individual stocks, mutual funds and/or exchange-traded funds (ETFs). For best results, take a close look at a bunch of brokerages to see which will serve you best. Here are some factors to consider:

Costs: Many major brokerages these days offer free trading for most stocks and ETFs. Depending on what you plan to be buying and/or selling, look into what each candidate brokerage will charge you.

Research: You’ll be able to access in-depth research reports on a wide variety of investments, all for free, at many brokerages. If you prefer certain sources, such as FactSet, Morningstar, S&P Global or Zacks, check to see what each candidate brokerage offers.

Education: If you’re wanting to learn more about investing, look into various brokerages’ offerings. Some even offer online webinars on stocks, bonds, economics and more.

Mobile apps: Some brokerages’ apps are more full-featured and easy to use than others.

Mutual funds: If you plan to invest in mutual funds, you can usually do so via the website of each fund, but it can be more convenient to do so through your brokerage. So look at how many funds and which families of funds (such as Vanguard, Fidelity or Schwab) are available.

Banking: Some brokerages offer banking services, such as checking accounts and mobile bill-paying.

Convenience: Some brokerages are internet-only, which is just fine for many people. But if you’d like to be able to visit a brick-and-mortar office, see which brokerages offer one near you.

You’ll find reviews and comparisons of good brokerages at fool.com/money/buying-stocks. You can also search online for terms such as “compare brokerages” or “best brokerages.”

My Smartest Investment

From T.H., via email: One of my smartest investing moves came about thanks to my son-in-law. He told me about the Axon Enterprise company, which was providing bodycams to his big-city police department, and he suggested I buy the stock. I bought 100 shares at $21 apiece.

Sadly, months later, he was killed by a drunk driver, and I didn’t look at that Schwab account again for years. When I finally did, I discovered that the stock had risen to $800 per share! I kicked myself for not having trusted him more. I miss him, but he did provide me with one last parting gift.

The Fool responds: We’re saddened to hear of your son-in-law’s untimely death, but you’re right to appreciate the gift he gave you. Your investment of around $2,100 grew into one worth $80,000! (With the stock recently trading near $557 per share, your stake would be worth around $55,700 today.)

Axon has profited greatly as many law enforcement units have purchased its body camera technology, software, Tasers, drones and more. The company is rolling out body cameras for corporate use, too, which could drive even more growth.

(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@fool.com.)

Who Am I?

I trace my roots to 1913, when the Rapp Motorenwerke company began producing aircraft engines. The Gustav Otto Flugmaschinenfabrik company took on my operations in 1922. I was soon making motorcycles, and by 1928, automobiles.

I started making jet airplane engines during World War II. In 1995, I began building my Roadster cars in the U.S., in South Carolina.

Today, based in Munich and with a recent market value near $60 billion, I’m home to my namesake brand as well as Mini Cooper and Rolls-Royce. (I briefly owned the Land Rover brand, as well.) I sold 2.7 million vehicles in 2024.

Who am I?

Forget last week’s question? Find it here.

Last week’s answer: Broadcom