Social media giant Meta Platforms (Nasdaq: META) has been using artificial intelligence technology to carve out greater efficiencies and increase its competitive advantage. It is spending so much on AI, though, that some investors balked at its third-quarter earnings report, sending the stock down.
But its results were not bad at all. Revenue rose 26% year over year to $51.2 billion. Meta’s base of daily active users on Facebook, Instagram, WhatsApp, Messenger and Threads rose 8% to 3.54 billion people.
However, operating expenses climbed 32% to $30.7 billion. Meta has spent heavily on employees with AI skills and on building out AI data centers. But the company is already reaping the benefits of its previous investments. CEO Mark Zuckerberg noted, “our AI recommendation systems are delivering higher quality and more relevant content, which led to 5% more time spent on Facebook in Q3 and 10% on Threads.”
Given the massive opportunity represented by Meta’s ability to capitalize on its AI spending, its recent stock price decline represents a buying opportunity for longterm believers. The stock seems attractively valued, with a recent forward-looking price-to-earnings (P/E) ratio of 22.5. (The Motley Fool owns shares of and recommends Meta Platforms.)
My smartest investment
One of my smartest investing moves came about thanks to my son-in-law. He told me about the Axon Enterprise company, which was providing bodycams to his big-city police department, and he suggested that I should buy the stock. I bought 100 shares at $21 apiece. Sadly, months later, he was killed by a drunk driver, and I didn’t look at that Schwab account again for years. When I finally did, I discovered that the stock had risen to $800 per share! I kicked myself for not having trusted him more. I miss him, but he did provide me with one last parting gift. – T.H., via email
The Fool Responds: We are saddened to hear of your son-in-law’s untimely death, but you are right to appreciate the gift he gave you. Your investment of around $2,100 grew into one worth $80,000! (With the stock recently trading near $557 per share, your stake would be worth around $55,700 today.) Axon has profited greatly as many law enforcement units have purchased its body camera technology, software, Tasers, drones and more. The company is rolling out body cameras for corporate use, too – which could drive even more growth.
(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@ fool.com.)
Ask the fool
Q. What happens if I can’t pay my taxes this year? – N.C., Cleveland, Ohio
A. First, understand that filing your tax return and paying your taxes are two different things. Regardless of your ability to pay, you still need to file your return on time. There are penalties for failing to file and failing to pay, and in the first months, the failure to file penalty is larger. So file on time and pay as much as you can to minimize penalties and/or interest charges.
If you cannot pay in full on time, you may be able to set up a shortterm or long-term payment plan at IRS.gov/paymentplan. If that does not work, you can also request an installment agreement by submitting Form 9465, Installment Agreement Request, with the IRS.
Another possibility is an “offer in compromise,” where the IRS accepts less than the full amount you owe. These are decided on a case-by-case basis, considering each taxpayer’s circumstances. A bank loan is a possibility, too, and one that might cost you less in interest than you would pay in IRS interest and penalties.
You can also try calling the IRS at (800) 829-1040 to discuss your situation and find out about your options. But note that like much of the U.S. government, the agency has undergone staffing reductions, with more potentially on the way. This can make it harder to reach its customer service representatives. The lengthy federal government shutdown also limited IRS operations.
Q. What’s collateral? – P.F., Portland, Oregon
A. Collateral is property or assets used to “secure” a loan. With a mortgage, for example, the home itself is the collateral, and you can lose it if you default on the loan. Some debt, such as credit-card debt, is “unsecured.”