1 Unstoppable Stock That Could Join Nvidia, Microsoft, and Apple in the $3 Trillion Club

Core Insights - Meta Platforms is experiencing above-trend earnings growth primarily driven by advancements in artificial intelligence (AI) [1][18] - The company is positioned to potentially join the $3 trillion market capitalization club, alongside Nvidia, Microsoft, and Apple [1][3] Company Overview - Meta owns major social media platforms including Facebook, Instagram, and WhatsApp, and has established itself as a leader in the AI sector with its Llama family of large language models (LLMs) [2][9] Financial Performance - Meta's stock surged by 11% following a strong second-quarter earnings report for 2025, raising its market capitalization to nearly $2 trillion [3] - The company reported a 22% year-over-year revenue increase to $47.5 billion, exceeding its forecast [8] - Earnings per share (EPS) rose by 38% year over year to $7.14, significantly surpassing Wall Street estimates [14] AI Impact on Business - Approximately 3.5 billion users engaged with Meta's apps daily, with AI enhancing user engagement and advertising revenue [5] - AI-driven recommendation engines increased user engagement time on Instagram by 6% and Facebook by 5% [6] - The efficiency of Meta's ad-recommendation model improved, resulting in a 5% increase in conversions on Instagram and a 3% increase on Facebook [7] Future Growth Potential - Meta's capital expenditures (capex) for 2025 are projected to be between $66 billion and $72 billion, aimed at enhancing data center infrastructure and AI capabilities [12] - Despite high capex, the company anticipates long-term growth through improved user engagement and ad conversions [13] - Meta's EPS growth rate has been robust, with a compound annual growth rate of 36% from 2014 to 2024, and an above-trend pace of 37% and 38% in the first and second quarters of 2025, respectively [18] Market Positioning - Meta's current P/E ratio of 28 is lower than the Nasdaq-100 index's 32.7 and the "Magnificent Seven" median P/E of 38.1, indicating potential undervaluation [15][17] - To align with the median P/E of the Magnificent Seven, Meta's stock would need to rise by 36.1%, potentially increasing its market cap to nearly $2.7 trillion [17]