Meta and Microsoft, AI stocks down about 25% from their peaks
Meta Platforms and Microsoft are both down about 25% from their peaks. Meta's advertising business and improvements in ad targeting were cited as supporting factors, while Microsoft was reported to have achieved year-over-year AI revenue growth of 123%.
Meta Platforms and Microsoft are trading at levels about 25% below their peaks. This figure has been cited as the basis for viewing both companies as "discount buying opportunities." The article classified the two stocks as noteworthy options from an AI-related investment perspective.
Meta's advertising business was described as remaining solid. The application of AI improvements to ad targeting, which enhances advertising efficiency, was cited as a basis for its valuation. However, concerns about the cost of large-scale AI investments were also raised in the market.
Microsoft was reported to be already monetizing its AI business. According to the article, AI-related revenue was reported to have grown 123% year over year. Strong growth in its cloud business, Azure, was also mentioned.
The article explains that both companies are trading at levels below the forward earnings multiple of the S&P 500 index. It concludes that this serves as an investment attraction. The specific multiple figures are based on the comparison presented in the article.
In summary, Meta’s advertising fundamentals and Microsoft’s already monetized AI revenue were cited as the respective rationales. With both stocks down by approximately 25% from their highs, the question of whether they are “undervalued” from a forward earnings multiple perspective is being discussed.
Sources: The Motley Fool
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