Got $1,000? Here's the Tech Stock I Think Has the Best Risk-Reward Setup in the Entire Market Right Now.
Key Points
Meta's advertising platform is seeing an AI boost.
The stock looks cheap from a historical standpoint.
- 10 stocks we like better than Meta Platforms ›
Finding high-reward, low-risk stocks isn't easy. There aren't a ton out there, as most of the time the market prices risky stocks lower and safe stocks higher to reflect the relative risk. But, once in a while, you'll find a stock with a great setup that looks like a genius buy.
Meta Platforms (NASDAQ: META) is that stock right now. It is delivering strong growth, has major upside driven by artificial intelligence (AI) in its future, yet trades for an attractive valuation. Now is the perfect time to scoop up shares, and investors should take advantage while the market isn't paying attention.
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Meta's stock is cheap for its performance
Meta Platforms operates several social media sites, including Facebook, Instagram, Threads, and WhatsApp. It generates a ton of money from these apps, and its revenue streams have only gotten larger since incorporating AI. That's required because Meta is spending so much on its AI computing capabilities that it needs to deliver some return on investment. However, it has bigger things in store for its AI capabilities than just ad improvements.
Meta is working to bring a superintelligence platform to the masses and deliver it in the form of augmented reality glasses. These could be a game changer for how AI is deployed in everyday life, and if Meta can deliver, it will be a huge revenue stream for the company.
In the meantime, its advertising-focused business is killing it, with revenue rising 33% year over year during the first quarter of 2026. Few big tech companies can match that level, underscoring how dominant Meta's platform is becoming.
Despite a bright future, as well as a strong and growing core business, Meta's stock trades for a low price. My favorite valuation ratio for the AI hyperscalers is the price-to-operating cash flow ratio, as it doesn't factor in capital expenditures and only looks at how much cash a company is producing. From this standpoint, Meta is one of the cheapest big tech stocks by far and is also valued cheaply from a historical standpoint.
META Price to CFO Per Share (TTM) data by YCharts
A normal big tech company trades for around 20 times cash from operations, with some trading at an even greater premium.
META Price to CFO Per Share (TTM) data by YCharts
While Meta historically traded at the lower end of this range, it's still a pretty cheap stock overall, which means massive returns if the market decides to give it an average premium. If one of its AI models can become a mainstream hit, the stock may do just that, delivering a one-two punch of growth- and value-powered returns. Even without the upside of a popular AI product, its ad business is still a solid base business that has delivered solid results over the past decade. That combination makes Meta one of the best stocks to buy now.
Should you buy stock in Meta Platforms right now?
Before you buy stock in Meta Platforms, consider this:
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Keithen Drury has positions in Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
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