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Many social media stocks are on the cusp of an AI-fueled renaissance. The potential of artificial intelligence (AI) is not lost on these tech giants. With vast reservoirs of user data at their disposal, social media companies are poised to ride the AI wave to new heights, paving the way for enhanced ad targeting and unparalleled user experience.
The allure doesn’t end with AI alone. The emergence of the metaverse promises to revolutionize the industry as 2D content morphs into dynamic 3D experiences. With spatial computing devices gaining traction, the next five years could herald a seismic shift in social media engagement.
Investment Opportunity: Meta Platforms (META)
Meta Platforms (NASDAQ: META) shines as a standout social media stock currently undervalued in the market. Under the visionary leadership of CEO Mark Zuckerberg, Meta leverages AI in unprecedented ways, propelling the stock to a remarkable 450% surge from its 2022 lows. With ongoing advancements in its language model capabilities and a keen eye on AI innovations, Meta is a force to be reckoned with, leaving rivals in its wake.
As the Quest headset and metaverse initiatives take center stage in the coming decade, Meta’s trailing P/E ratio of 35.3 hints at untapped value rather than exuberance.
Harnessing Potential: Snap (SNAP)
Snap (NASDAQ: SNAP) may not be Meta, but its journey back from a 90% stock plummet is testament to its resilience. Armed with generative AI tools and a host of innovative features like AR filters and AI-powered chatbots, Snap is catering to its youthful user base creatively. The road to sustained growth might demand a more strategic investment in emerging technologies.
Learning from Meta’s blueprint, Snap’s foray into sponsored AR filters could redefine advertising in the realm of mixed reality.
Resilient Recovery: Pinterest (PINS)
Pinterest (NASDAQ: PINS) weathered a storm back in 2021 but is now charting a resurgence. Despite lingering below its all-time peak by 58%, Pinterest holds promise as it explores innovative ad delivery methods. Recent dips offer a buying window as the company pivots towards AI-driven content personalization.
Trading at a forward P/E of 28.1, PINS stands out as a cost-effective social media stock. The recent setback notwithstanding, Pinterest’s commitment to AI and ad ventures signals a bullish trajectory for astute investors.
On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.
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