Missed Nvidia in 2009? This Rare Signal Is Flashing Again.\u00a0In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia.\u00a0For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia.\u00a0Continue \u00bb<\/a> <\/p>\n At roughly 18 times forward earnings estimates, the valuation looks attractive. But for the stock to deliver meaningful upside, investors should track whether AI-driven spend is translating into measurable returns, such as stronger ad pricing and higher user engagement. The company may also have opportunities outside its core business to monetize this spending. <\/p>\n Meta’s core ad business is humming. In the second quarter, revenue from its family of apps climbed 27% year over year to $59 billion. The global average price per ad rose 12%, a sign that AI tools are improving performance for advertisers — and giving Meta more pricing power. <\/p>\n Engagement is trending the right way, too. Instagram saw double-digit growth in time spent on the app, while Facebook saw time spent increase 9% worldwide. <\/p>\n Meta also highlighted momentum for its AI assistant, with daily interactions in Meta AI up 60% after the integration of its flagship Muse Spark model. <\/p>\n So far, strong revenue growth is validating Zuckerberg’s move to double down on compute. The key question for investors is whether those trends hold as capital spending stays elevated. <\/p>\n Short-term pain for long-term gain <\/p>\n Through its Meta Compute initiative, the company announced a new 1-gigawatt data center with BlackRock aimed at training internal models, supporting ad growth, and enabling personalized agents and new products. <\/p>\n Data centers and chips seem to only be getting more expensive. Second-quarter capital expenditures (capex) hit $30 billion, nearly wiping out free cash flow, which totaled just $1.7 billion. Management’s full-year guidance calls for capex of $130 billion to $145 billion. <\/p>\n But CFO Susan Li shared an important perspective about the pace of spending that probably doesn’t get enough attention from investors: “The industry has under-built historically for the wave of AI adoption, making existing capacity, including our own, extremely valuable.” <\/p>\n Meta isn’t just building for today’s demand — it’s trying to lock in compute capacity that can power AI features for years. That’s classic short-term pain for long-term gain. <\/p>\n There’s still a risk of overbuilding, but Meta may have a lucrative backup plan. Zuckerberg noted that the company is already seeing strong interest from other businesses in using its compute — and at prices well above Meta’s cost. <\/p>\n If Meta can monetize that capacity through its ad engine — and potentially via third-party demand — the market may be underestimating the long-term revenue and earnings from these investments. At this valuation, Meta’s stock<\/a> is worth considering. <\/p>\n Should you buy stock in Meta Platforms right now? <\/p>\n Before you buy stock in\u00a0Meta Platforms, consider this: <\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0Meta Platforms\u00a0wasn’t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. <\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $386,727!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you’d have $1,232,139!* <\/p>\n That performance is why people listen. With a track record of\u00a0beating the S&P 500 by 4x,\u00a0Stock Advisor\u00a0offers a distinct advantage. Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built for the long haul. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of August 2, 2026. <\/p>\n John Ballard<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> Image source: The Motley Fool. AI has made a big impact on advertising <\/p>\n