The market has crowned Nvidia (NVDA +2.54%) one of the top artificial intelligence (AI) stocks out there. In the past five years, its shares have rocketed 865% higher (as of Sept. 16). And the business — the largest in the world by market cap — is currently worth a staggering $5.2 trillion.
Nvidia sells the most widely used AI processors at the foundation of the data center build-out. As a result, its financial performance since the AI megatrend took shape has been jaw-dropping. Over the last three years, its net income surged almost tenfold. It’s extremely difficult not to be bullish on this company.
However, investors can find one valid reason that supports the case for Meta Platforms (META +1.34%) being the best AI stock to buy in 2026. It all comes down to questioning where the value from this AI revolution will eventually accrue.
Image source: The Motley Fool.
Focus on the application layer
It’s a realistic possibility that in the long run, the chips, data centers, cloud computing platforms, and AI models all become commoditized. This means that there will be minimal differentiation between the offerings of the various competitors in each of those arenas. Consequently, a logical argument can be made that most of the value will eventually accrue to the application layer, benefiting the businesses that create products, services, and experiences enabled by AI for end users.
Think about the internet revolution that took off in the 1990s. The companies that built the fiber optic infrastructure that supports the internet can’t hold a candle to the enterprises that actually leveraged the new technology to serve people in new ways.
Household names today, like Amazon, Alphabet, Meta Platforms, Uber, and Airbnb, created entirely new experiences, building thriving businesses in the process. These are extremely valuable companies.
Another insightful way of viewing this situation is to consider Apple and the iPhone. For the average person, this hardware device line elegantly allows access to the digital world without requiring them to be technologically proficient. When it comes to AI, consumers want the technology embedded in things that simply work. Most folks don’t want to have to figure out on their own how to use AI.
Meta’s massive ecosystem puts it in a favorable position
Meta owns some of the most popular platforms on Earth. Across its family of apps, it has 3.6 billion daily active users. This gives it incredible reach. If the value in AI is going to accrue to the application layer, it makes sense that the company with the most dominant apps is in a position to be a winner.
Meta is already leveraging AI to boost engagement among its users. And for its advertising customers, its AI tools are improving the effectiveness of marketing campaigns.
Further adding to Meta’s strong competitive position is its thriving advertising platform. The business benefits from a scaled ad ecosystem, network effects, a treasure trove of user data, and strong user engagement, all of which position it to monetize free AI usage better than other companies.
Unlike enterprises, which will gladly pay for AI offerings if they offer the promise of boosting employee productivity, consumers don’t necessarily have the willingness to pay money for these kinds of tools. The data backs up this claim. According to a study by the Bank of America Institute, only 3% of households with accounts at that bank are paying for AI services. Layering advertising onto those offerings seems to be the best way to profit from providing consumer AI products and services for free.
Meta is leaning in. It recently launched Muse, an AI agent that can handle various tasks on behalf of users. Founder and CEO Mark Zuckerberg says he wants the company to introduce what he calls “personal superintelligence.” During its second-quarter earnings call, he asserted that it wouldn’t be surprising if, in five years, billions of people were using AI agents daily. Muse is a step in that direction.
Today’s Change
(1.34%) $9.00
Current Price
$682.31
Key Data Points
Market Cap
Day’s Range
$667.05 – $683.20
52wk Range
$520.26 – $790.80
Volume
495.9K
Avg Vol
18.3M
Gross Margin
81.75%
Dividend Yield
0.31%
Meta shares are attractively priced
Investors should also take advantage of Meta’s current valuation. This “Magnificent Seven” stock trades at a forward price-to-earnings ratio that’s below 20. Maybe the market believes Meta isn’t positioned well in the AI race. However, I think that view will prove to be incorrect over the coming years, as the business is able to gain financially from its AI efforts.
Shareholders who buy today will benefit from rising earnings and improving sentiment.