Morgan Stanley's Head of Internet Research in the United States, Brian Nowak, explained in an interview $Meta Platforms (META.US)$ how to monetize its large user base using artificial intelligence, and stating that the company is leading the way in AI monetization.

Nowak said: "In terms of how to monetize the generation of artificial intelligence and support GPU-based machine learning, Meta is still the earliest company. They are building better models to more effectively analyze all data. As they analyze more data, the time spent by each user is increasing. Each user spends 30 to 40 minutes a day on Facebook, Instagram, and other platforms, and it is still growing. The most important thing is that their way of making money through more relevant ads is improving, with higher ad click-through rates, actually driving more trades. Therefore, when we consider this early generative artificial intelligence cycle, Meta is still the company that has gone the furthest in building new models to better analyze its leading first-party data, driving more engagement, and more effectively monetizing this engagement.

Despite strong quarterly performance, Meta's stock price has fallen due to concerns from investors about the rising expenses related to artificial intelligence. However, those bullish on Meta believe that Mark Zuckerberg's continued investment in the field of artificial intelligence is completely reasonable.

By leveraging artificial intelligence technology, Meta has driven growth in usage and advertising revenue through improved algorithms and user experience. Meta also reports that its Llama artificial intelligence model has been widely adopted, attracting over 0.5 billion monthly active users on its platform. With Meta expanding its artificial intelligence infrastructure, this progress will enable the company to achieve strong profitability over the next two years. Furthermore, Meta's progress in Reels and WhatsApp helps manage the growth in capital expenditures, as the company strives to remain competitive in the field of artificial intelligence.

Meta has established clear profit strategies for its generative artificial intelligence (especially Llama3), making it a strong competitor to OpenAI's ChatGPT and others. With a massive user base of 3.3 billion, Meta has data and distribution advantages that can capture a significant share of the GenAI market. While short-term investors may be concerned about Meta's increased AI spending, its 24x estimated PE ratio (based on a forecasted EPS of $24.62 for the 2025 fiscal year) positions it among its peers.$Apple (AAPL.US)$ 、$Amazon (AMZN.US)$、$Microsoft (MSFT.US)$Second only to the US, the second largest most affordable large technology stock. $Alphabet-A (GOOGL.US)$ The second largest most affordable large technology stock after Apple.

According to some forecasts, Meta is expected to achieve earnings per share of $25-26 next year, slightly higher than consensus expectations. Strong US economy, lower inflation, favorable online advertising pricing, and artificial intelligence investments are factors that may drive revenue growth. If Meta's valuation remains in line with the industry average PE ratio of 26.6, the stock price could exceed $600.

Alger Spectra Fund also pointed out in its investor letter for the third quarter of 2024: 'Meta operates the world's largest social network, with over 3 billion monthly active users. Over 95% of the company's revenue comes from advertising, evenly split between the North American and international markets. The strong performance in the second quarter, with revenue and profit exceeding analysts' expectations, has contributed to the stock price. The management has also raised revenue expectations for the 2024 fiscal year, citing improvements in ad monetization. CEO Mark Zuckerberg stated that artificial intelligence has played a key role in these successes, as the company uses AI to enhance targeting, measurement, ranking, and ad delivery. Higher user engagement, driven by video rankings, content recommendations, and single-video views, has also supported growth. Additionally, optimizing video ad placements and automating ad operations will further drive profitability.'

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