We recently published a list of 10 Stocks in Wall Street’s Watchlist. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other stocks in Wall Street’s watchlist.

Dan Niles, Niles Investment Management founder, in a latest program on CNBC reiterated his concerns about a slowdown in AI spending and said that major technology companies were already facing the impact of a downbeat trend in the industry before the tariff wars started:

“When the MAG 7 reported the December quarter or calendar Q4, six of the seven had their March revenue estimates already cut. So think about that for a second. But the thing is, when the Fed’s cutting like it was last year, nobody cares, right? If the stocks are going up, the charts look good. Why worry about fundamentals or valuations?,” Niles said. “Because the stocks are going higher. So looking forward, I expect all the estimates to come down yet again for the June quarter. When these companies report the March quarter, they were already having troubles when they reported the December quarter before all this tariff stuff kicked in.”

Niles said that companies were buying more ahead of the China tariffs because they expected that duties were coming from the US.

“You can just see that from the China export data already, where for China as a whole, in the month of March, exports were up 12.4%. People were expecting 4.6%. So that’s a massive beat there. And so you can already tell demand’s being pulled forward. So my thought was there was a payback period coming anyway.”

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Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Investors: 235

Steve Weiss, Founder and Managing Partner of Short Hills Capital Partners, explained in a latest program on CNBC why he’s buying more Meta Platforms, Inc. (NASDAQ:META) shares:

“I said this when the stock was trading at the highs—it was overvalued, and I knew it would correct because it just couldn’t maintain that valuation. That was euphoria on Trump’s win, which was obviously misplaced. So I was willing to suffer for it coming down, and I had trimmed. I had a super-sized position, and I had trimmed a little bit.

Now at this point, when you’re selling at a slight discount to the market despite having, I would say, not complete protection against the craziness and the chaos in DC but pretty good protection—except for, you know, the supply chain for the data centers, which they are largely having others build, which is a small number relative to the overall revenue—so I think that’s the time to step up when the multiple comes down.

Look, could it go lower? Absolutely. Could it go lower? You know, it could go lower. But to your point, you can’t market time—it’s impossible. So when I bought the stock, when I added to it yesterday, it was my final trade yesterday.”

Meta crushed expectations in the last quarterly results but yet again pointed to higher expenses in the future. In 2025, it sees total operating expenses in a range of $114-$119 billion, with 19-25% y/y growth. Capex is expected to rise 61-74% y/y to $60-$65 billion, compared to just $37.3 billion in FY24. Advertising rose strongly, but analysts believe it should be seen in the context of higher political ad spend and holiday quarter perspective.  In 2025, the company might not be able to keep reporting double-digit growth in ad pricing amid weaker consumer spending and a cautious macroeconomic backdrop.

In the long term, Meta shares are expected to grow because of AI. How?

Meta Platforms (NASDAQ:META) is driving usage and ads revenue by improving its algorithms and user experience thanks to AI. Meta Platforms (NASDAQ:META)’s advancements in Reels and WhatsApp are helping manage CapEx growth as the company strives to stay competitive in AI. Meta Platforms (NASDAQ:META)’s substantial user base of 3.3 billion provides a data and distribution edge that could capture a significant share of the GenAI market.

Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:

“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.

For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.

Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)

Overall, META ranks 2nd on our list of stocks in Wall Street’s watchlist. While we acknowledge the potential of META, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.