You'll find growth stocks in all industries, but technology offers you one of the broadest selections. And tech stocks with strengths in artificial intelligence (AI) are climbing right now while also offering great potential over the long term. What could be a revolution is just getting started, with the AI market forecast to reach more than $1 trillion by the end of the decade.
This means that even if an AI company's earnings and stock price are rising today, the opportunity could be far from over. The stock might pause or dip here and there, but overall momentum could continue, and this sort of player might deliver top long-term returns.
The question is: Does any company stand out as ripe to deliver such results? As a matter of fact, one does -- and with $1,000 (or even less), you can pick up shares of this ultimate growth stock.
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More than 3 billion users every day
Meta Platforms (META -2.41%) is a company most of us probably have contact with on a day-to-day basis -- that is, if you're a user of Facebook, Messenger, Instagram, or WhatsApp. This social networking leader estimates that more than 3.1 billion people use at least one of its apps every day. And this has helped Meta grow over time through advertising, which makes up the lion's share of its revenue.
Advertisers rush to Meta because they know a good deal of their target audience can be found there. And the more time users spend on Meta apps, the more advertisers want to keep pouring in ad dollars. In the most recent quarter, ad revenue rose 24% to $38 billion, out of $40 billion in total revenue.
OK, so now you might be wondering: Where does AI fit in? Meta is investing in AI to make the social media experience even better, so you'll want to spend more time on its apps. Management aims to roll out AI across its products and services.
The company recently launched Meta AI, a conversational assistant, on certain apps. And CEO Mark Zuckerberg says that eventually all users, in areas spanning professional to leisure, will have an AI to suit their needs.
The company already has been building its reputation as a leader in the area of large language models (LLMs) with its development of Llama, and Llama 3 currently is in training. Llama is powering Meta's own AI programs, such as the conversational assistant, and it's also open for use by others thanks to the company's open-source policy.
Why an open-source policy is the right one
And over time, this policy could help Meta win in AI. That's because an open-source model means many people will use its platform, troubleshoot, and offer feedback -- helping improve its technology. The great number of users on the platform also could ensure security and help it become an industry standard. If so, that leadership would encourage top talent to join the company. So the decision to go the open-source route looks like a wise one.
The company is going all in on AI right now, saying it will be the biggest investment theme this year. It's pledging to have 600,000 graphics processing units (GPUs) on board by the end of 2024. GPUs are the chips that power tasks such as training AI models, and Zuckerberg has said he's focused on building plenty of capacity since Meta is "playing to win" in AI.
It recently announced its first-ever dividend, showing that it has the financial strength to share its success with shareholders even while continuing to grow in this high-potential area.
The stock has climbed more than 100% over the past year, but it still is trading for only 26 times forward earnings estimates -- a very reasonable price for a growth player. And that's why right now, Meta Platforms is the ultimate growth stock to invest in with $1,000.
