Prosper Junior Bakiny, The Motley Fool

Sun, Jun 1, 2025, 6:30 AM5 min read

• Fund manager David Tepper increased his stake in Meta Platforms in the first quarter.

• The company's AI-related work is already producing results, but the best is yet to come.

• Meta Platforms could beat the market in the next five years, even as it faces some obstacles.

• 10 stocks we like better than Meta Platforms ›

The artificial intelligence (AI) market continues to grow rapidly. With many companies competing for supremacy in the field, investors have numerous options to choose from today. It's not a bad idea to look to famous names on Wall Street for investing inspiration, either. Consider David Tepper, the billionaire founder of Appaloosa Management, a hedge fund.

During the first quarter, Tepper and his team decreased the fund's stake in several high-profile AI players, including Amazon, Microsoft, and Nvidia. Meanwhile, positions in Facebook's parent company, Meta Platforms (NASDAQ: META), increased during the period. Here's why investors looking to cash in on AI should follow Tepper's lead and purchase shares of Meta Platforms.

Meta Platforms' work in AI has had an impact on its financial results. The company successfully increased engagement on its suite of social media websites and apps by utilizing AI-powered algorithms. As its massive ecosystem of 3.4 billion daily active users continues to deepen, advertisers are increasingly seeking it out to place ads in front of their target audiences.

That means higher ad revenue, Meta Platforms' bread and butter. However, the company's most important work in AI may well lie elsewhere. Meta Platforms developed and released Llama, a large language model (LLM), to the world completely free of charge. This decision might seem like a head-scratcher. But Meta Platforms' founder and CEO, Mark Zuckerberg, explained the importance of this open-source model.

The company aims to attract talented AI developers to work on it, as it's free and easy to modify, and ultimately make it the leading LLM on the market. Meta Platforms is taking an almost democratic approach, one it believes will yield tangible results sooner rather than later. Llama powers Meta AI, an AI virtual assistant. As the company's work progresses, it will be able to use AI in even more ways to boost its user base and engagement.

On the other side of the commerce equation, it will enable businesses to launch better-targeted, cost-efficient ads. We are still in the early innings of Meta Platforms' AI revolution, and the company isn't sparing any expense. It plans to invest hundreds of billions of dollars in AI infrastructure in the coming years.