The 3 trillion dollar club is extremely exclusive. Since inviting Apple to the hall as its first member in early 2022, only two other companies have been through the doors, via the doors, Microsoft and Nvidia. At the time of writing, only Apple has a market capitalization of over $3 trillion.
However, it is unlikely that Apple will remain the sole member of Elite MegaCaps. Microsoft or Nvidia is likely to rise high enough for the stock to return over time.
But one thing that all these companies have in common is that they are all tied to artificial intelligence (AI). All the biggest tech companies spend a lot of money on AI infrastructure and development (which will greatly help Nvidia’s profits) to drive their business into a $3 trillion club.
However, some companies stand out as businesses that can have a major impact on products and services from advances in AI, and have invested heavily to get there.
That’s the meta platform (NASDAQ: Meta) You will be able to join the $3 trillion club soon in 2028.
Image source: Getty Images.
Meta is planning a major step up this year in AI investments. Ahead of the company’s fourth quarter revenue report in January, CEO Mark Zuckerberg posted to Facebook about its plans to allocate between $60 billion and $65 billion to capital expenditures this year. This is an increase of 59% from last year’s midpoint.
There is a good reason why Meta spends so much money on AI. First of all, it already sees great results. The company has applied learning from the development of large-scale language models to allow it to create more general algorithms. The results were better content recommendations, increasing engagement on Facebook and Instagram platforms, increasing the impression of the ads.
In addition, Meta is seeing improvements in advertising value. Not only is it more relevant with improved recommendation algorithms, but Meta’s AI tools make it easier for marketers to create better, higher configuration ads.
As of the end of January, over 4 million advertisers used Meta’s Generated AI Ad Creation Tool. Additionally, the average ad prices rose 14% in the last quarter, but the company offered more ads to its users.
Meta has also just incorporated AI into its products and services. Zuckerberg envisions a future where they have developed an AI agent that can act as a business marketing director on the company’s platform.
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In a revenue call last year, he said, “Advertisers can basically just communicate their business goals and budgets and do the rest.” You can create hundreds of personalized ads and target very small groups with unique messages to enhance conversions.
A company can do the same with user-generated content. Creators can expand the scope of content with translations generated by video dubbed AI, and Meta could help creators increase engagement by tweaking small parts of the image.
AI can have a major impact on the company’s efforts to monetize WhatsApp and Messenger. Recently, we have released a beta version of Business AIS. This allows small businesses to create AI chatbots for messaging services customer service and sales. If these AI agents become more sophisticated and Meta can make them easier, it could be a $100 billion opportunity, according to William Blair analyst Ralph Schackart.
Meta is also working on AI applications such as Meta AI chatbots and Ray-Ban smart sunglasses. The increased adoption of these products provides opportunities to monetize future user engagement.
Meta advances in AI have put us in a position to continue growing our top line very quickly over the next few years. However, the huge amount of spending on the data center begins to weigh revenue once depreciation appears on the income statement.
Nevertheless, the company could show strong revenue growth as AI innovations and new products make revenue faster than rising costs. The impact of AI on core businesses gives you significant cost-worthy opportunities when more agent AI is introduced in ad creation tools, WhatsApp and Messenger. Additionally, AI chatbots are rapidly approaching the management’s goal of 1 billion users, at which point Meta has historically been aiming to monetize its products.
The key is that the real-life lab business is still an opportunity to improve profits. Last year, it accounted for a $17.7 billion drug on operating profit, so by having the business smashed, we were able to beat the Meta total operating profit margin by 50% from last year’s 42%.
If META generates an average revenue growth rate of approximately 12% per year over the next five years and is able to increase its operating profit margin to just 44%, then operating profit will increase by 84% over that period. If Meta maintains the tax rate and investors continue to value it with 26x advance revenue, it will value it at around $3 trillion by the end of 2028.
However, Meta is undoubtedly trading in relative bargains with 26x advance revenues. Other AI stocks transactions for much higher revenue multiples. This leaves a rather wiggle room when the meta is estimated to reach $3 trillion. Investors could be able to absorb higher tax rates or slower margin expansion if the meta shows strong topline growth and returns from large AI spending. This gives you confidence to join a $3 trillion club by 2028, even if there are some ups and downs on that path.
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Currently, we are issuing “double-down” alerts to three incredible companies, and we may not have a chance like this anytime soon.
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*Stock Advisor will return as of March 3, 2025
Randi Zuckerberg, a former director of market development, Facebook spokeswoman and sister to Metaplatform CEO Mark Zuckerberg, is a member of Motley Fool’s board of directors. Adam Levy has positions in Apple, Meta Platforms and Microsoft. Motley Fool has positions for Apple, Meta Platforms, Microsoft and Nvidia, and is recommended. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
Meet Unstoppable Artificial Intelligence (AI) Stocks that can join a $3 trillion club by 2028 was originally published by The Motley Fool
