Artificial intelligence (AI) stocks delivered healthy gains in 2023 and 2024. However, due to the recent broad market sell-off, 2025 has been a tough year so far for companies looking to benefit from the fast-growing adoption of this technology.

The tech-laden Nasdaq Composite index briefly entered bear territory and is down 15% from its all-time high as of this writing. The tariff-related turmoil has sent investors into risk-reduction mode as they look to protect their capital amid the economic uncertainty caused by a potential trade war.

This explains why AI leader Nvidia has dropped 15% year to date despite delivering solid results recently. The stock was flying high previously as tech giants and countries lined up to buy its AI data center graphics cards. However, the current market conditions have led many investors to book profits in the stock.

AI adoption is in its early phases, and Nvidia has enough catalysts that could help sustain healthy growth for a long time to come, but the stock could remain under pressure from tariff-related uncertainty.

However, there is another tech giant that could come out of its recent slump and even outpace Nvidia's returns in 2025 and beyond -- Meta Platforms (META 14.45%).

AI has given Meta a nice boost, and this is just the beginning

Known for its popular social media applications -- including Facebook, Instagram, Messenger, and WhatsApp -- Meta has built a massive user base that puts it in a strong position to capitalize on the proliferation of AI within digital marketing.

At the end of 2024, the number of daily active users across Meta's family of apps stood at 3.35 billion. That's around 40% of the world's population.

That makes Meta one of the top choices for brands and businesses looking for access to a huge audience. The social media giant has been offering AI tools to its advertisers to help them reach customers more efficiently.

For instance, Advantage+ helps advertisers automate the creation of ads, freeing up their time to focus on more strategic work. And Advantage+ uses AI to help businesses optimize ad campaigns to deliver the best results.

The company's AI ad tools are giving advertisers higher returns. According to eMarketer, Meta's AI-powered ads had 22% higher returns in 2024 compared to the average ad on its platform. AI helps customers improve audience targeting for higher engagement and improved conversion rates.

Thus, advertisers are willing to pay more for access to Meta's apps. This has led to a 14% increase in the company's average price per ad in the fourth quarter of 2024. In just six months, the number of advertisers using Meta's generative AI ad tools has also quadrupled to 4 million.

To provide more AI features for businesses, the company's upcoming Llama 4 open-source model is going to help them integrate agentic AI functions into their operations. With its new AI reasoning model, Meta aims to reach small businesses that don't have the resources to hire development teams.

A company executive recently pointed out that 200 million small businesses are using its services globally. It plans to help those businesses reduce redundancies, find more customers, and provide better services with its agentic AI solutions.

Agentic AI is a major opportunity with one estimate from Market.US predicting 44% annual growth for the industry through 2034. The technology's ability to operate autonomously and perform tasks without the need for human intervention makes it particularly attractive.

In all, Meta Platforms is on track to make the most of large AI-related business opportunities in the long run. Its core digital advertising market, for instance, is expected to exceed $1.2 trillion in revenue by 2030, growing 15% annually. Meta is growing even faster with 22% revenue growth in 2024 to $160.6 billion, thanks in part to the implementation of AI tools.

Growth potential and valuation point toward healthy upside for the stock

Meta Platforms carries a 12-month median price target of $770 among 74 analysts covering the stock, with 86% of them rating it a buy. That price target represents a gain of 31% from where the stock trades as of this writing.

Analysts also expect revenue to jump 14% in 2025 to $187.7 billion, but the fast-growing adoption of generative AI tools within the digital ad market could help the company beat that projection.

Strong bottom-line growth has pushed the company's valuation to just 24 times trailing earnings -- its lowest level in two years and a discount to the Nasdaq 100 index's price-to-earnings ratio of 27. Buying this stock seems like the smart thing to do before it starts soaring once again.