While many companies are looking for ways to profit from artificial intelligence (AI), Meta Platforms (NASDAQ: META) has flipped the narrative on its head. The company has long used sophisticated algorithms to surface relevant content and direct targeted advertising to users of its social media platforms. The advent of generative AI has taken that approach to the next level. When Meta reported its quarterly results after the market close on Wednesday, one thing was crystal clear. The company continues to ...

Core Insights - Meta Platforms and Amazon are projected to surpass the combined market value of Nvidia and Palantir by the end of the decade, with Nvidia at $4.3 trillion and Palantir at $395 billion, totaling approximately $4.7 trillion [1][2]. Meta Platforms - Meta Platforms owns three of the four most popular social media networks, providing significant insights into consumer preferences, which enhances its advertising targeting capabilities [3]. - The company has developed custom AI chips and large language models, leading to increased user engagement and higher ad conversion rates [4]. - Meta is also working on a superintelligence system for augmented reality smart glasses, aiming to dominate the smart glasses market with a 73% share [5]. - Current trading at 28 times earnings, Meta's earnings are expected to grow at 16% annually, potentially increasing its market value to $4.8 trillion by late 2030 [6][8]. - Even if growth expectations are not fully met, the current price offers an attractive entry point for long-term investors [7]. Amazon - Amazon's investment thesis is based on its leadership in e-commerce and cloud computing, with a strong presence in retail advertising and AWS [9]. - The company is actively monetizing AI across its businesses, offering various cloud services and developing AI tools for retail efficiency [10][12]. - AWS has introduced custom AI accelerators that outperform current GPUs, with partnerships to enhance AI model development [11]. - Amazon's operating margin has improved, with potential for further enhancement through AI and robotics innovations [13]. - Trading at 33 times earnings, Amazon's earnings are forecasted to grow at 19.5% annually, potentially reaching a market value of $4.8 trillion by late 2030 [14][15].

Group 1: Philippe Laffont and Meta Platforms - Hedge fund manager Philippe Laffont has made Meta Platforms his largest holding, accounting for over 7% of his portfolio after purchasing 355,000 shares [2][10] - Meta Platforms is the second-largest adtech company globally, owning three of the four most popular social media networks, which provides significant consumer insights for targeted advertising [8][9] - Meta reported a 26% increase in revenue to $51 billion and a 20% increase in net income to $7.25 per diluted share in the third quarter, despite a stock decline due to increased AI spending plans [10][11] Group 2: Nvidia's Position and Challenges - Philippe Laffont trimmed his position in Nvidia by selling 1.6 million shares, although it remains his eighth-largest holding at 4.5% of his portfolio [2][7] - Nvidia holds over 90% market share in data center GPUs, with spending in this market expected to grow at 36% annually through 2033 [3][7] - Export restrictions have severely impacted Nvidia's access to the Chinese market, which previously accounted for 95% of its market share, now expected to approach zero [5][6]

Group 1: Meta Platforms - Meta Platforms is positioned to benefit from the surge in artificial intelligence (AI) spending, with analysts estimating a more than 600% increase in AI spending across infrastructure and software by 2028 [1] - The company owns three of the four most popular social media networks, providing insights into consumer preferences and enhancing its advertising capabilities [4] - Meta has been investing heavily in AI technologies, including custom chips and machine learning models, leading to increased user engagement and higher ad conversion rates [5][6] - The company aims to automate the ad creation process by next year, which could significantly enhance its advertising efficiency [6] - Forecasts indicate that Meta could achieve double-digit revenue growth for several years, driven by a 14% annual increase in ad tech spending through 2032 [7] - Wall Street estimates earnings growth of 17% annually over the next three years, making its current valuation of 27 times earnings appear reasonable [8] Group 2: Pure Storage - Pure Storage specializes in enterprise data storage solutions, particularly all-flash arrays, which offer superior storage density and lower power consumption compared to traditional hard-disk drives [9] - The company has been recognized as a leader in primary block storage platforms by Gartner, with its FlashBlade systems noted for their high density and efficiency in supporting AI workloads [10] - Pure Storage's next-generation FlashBlade systems are expected to be the highest-performing storage platform for AI and high-performance computing [11] - Meta Platforms has selected Pure Storage for its data center storage infrastructure, indicating strong industry confidence in Pure Storage's technology [11] - Wall Street anticipates adjusted earnings growth of 27% annually through January 2027, making its current valuation of 46 times adjusted earnings reasonable [11]