Despite the step back that the US stock market has taken this year, artificial intelligence is still dominating the conversation surrounding the sector. Indeed, it is still driving demand in tech and driving significant investment. In one rather surprising development, Meta Platforms (META) has seen its AI outperform in its recent earnings, leading many to question if the stock is a clear buy in May.
The company is often one of the most overlooked Magnificent 7 stocks. It doesn’t yet have the widespread appeal of an AI chipmaker like Nvidia (NVDA) or a diversified tech giant like Amazon (AMZN). However, its recent data could help solidify it as a stock to watch out for this month.
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In late April, Meta Platforms announced a new AI standalone app. Indeed, the offering was set to help it better compete with companies dominating the consumer facet of the technology, like Alphabet (GOOGL) and OpenAI. That has continued the social media firms’ AI push that could already be paying off in a big way.
The stock has had a difficult 2025, as many of its mega-cap peers did. With increased trader caution amid macroeconomic pressures and geopolitical tensions, things are expected to begin easing up in the near term. That could be huge for META, as its AI outperformance could drive it to be a clear buy for the month of May.
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For Meta’s Q1 earnings report, its revenue came in at the $42.31 billion mark, up 16% year-over-year. Moreover, its earnings per share increased 37%, reaching a $6.43 level. Interestingly, that was far above analysts’ expectations of revenue, coming in at just $41 billion.
What is interesting to note amid the impressive results is the part that AI is playing. The company notes that AI-powered recommendations have driven traffic on Facebook and Instagram to increase. Specifically, users are spending 7% and 6% more time on the application because of the tools.
That is clearly a benefit to advertisers, but not the only way AI is helping. The technology is also increasing the ability for advertisers to find relevant audiences. This is why META’s ad impression jumped 10% from last year. That sector’s success is not dependent on macroeconomic conditions. Therefore, I could fuel a mad dash to buy up the stock that is strategically placed to benefit from its own AI advancement.
