Evaluating Meta as a Top Choice Among the Magnificent Seven Stocks Following Its AI Success on the App Store

Key Points

• Investors express concerns over Meta Platforms’ high AI-related expenditures despite its potential for innovation.

• Meta’s AI app, Muse, quickly became the most downloaded free app on the U.S. App Store after its launch.

• Second-quarter revenue reached $60.8 billion, reflecting a 28% year-over-year increase.

Meta Platforms (NASDAQ:META) launched its AI agent, Muse, on September 8, 2023. Within five days, Muse topped the U.S. App Store’s free app rankings with approximately 730,000 downloads. This success may counteract investor concerns about the company’s substantial AI investments, which have led to notable declines in net income and free cash flow in recent quarters.

Despite the hesitancy over ongoing AI spending, second-quarter revenue surged to $60.8 billion, marking a 28% increase from the previous year. Additionally, Daily Active Users reached 3.60 billion, a 3% growth year-over-year. As a result, Meta’s stock is up over 20% since the Muse launch, highlighting the potential for future revenue if Muse transitions into profitable subscription offerings.