Meta’s $360 Billion Rally to Collide With Lofty AI Expectations

When it comes to social-media stocks, there’s Meta Platforms Inc., and then there’s everyone else.

The Facebook parent has been the best-performer in the sector this year by far amid a surge in profitability. Delivering better revenue growth, it’s also cheaper than smaller peers like Snap Inc. and Pinterest Inc.

But to keep a rally that’s added more than $360 billion in market value going, Meta must show it can maintain such growth when it reports earnings on Wednesday. Of particular interest to investors: seeing a return on investment from hefty spending on artificial intelligence.

“The case is still there with some of the initiatives around AI and everything they’re doing to continue to improve targeting and engagement,” Hanna Howard, portfolio manager at Gabelli Funds, said. “There’s still room for growth on the top line and to continue to improve in margins. And, where it’s trading right now, at these levels it does still look attractive.”

Shares rose 1.7% on Wednesday.

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