Investing

Prediction: Meta Platforms Will Be Worth More Than NVIDIA in 2028

Joey Frenette

Published: December 12, 2024 11:31 am

If there’s one stock that’s deserving of a lengthy breather after an explosive sprint forward, it’s Nvidia (NASDAQ:NVDA). Shares of Jensen Huang’s GPU company have risen by close to 700% in the last two years. And while Nvidia hasn’t yet run into a brick wall with its growth, we’re entering a relatively quiet season that could see Nvidia consolidate or even enter a correction as the rest of the market (the S&P 499, if you will) looks to take off.

As the rest of the Magnificent Seven finally break out to hit new all-time highs (Alphabet (NASDAQ:GOOG) was one of the latest to do this on the back of its Gemini 2.0 launch and surprise quantum-computing breakthrough), it can feel somewhat discouraging to be hanging on Nvidia shares as they give up some ground. In the past month, NVDA stock has pulled the brakes, falling by close to 7%, thanks in part to concerning headlines relating to increased scrutiny from Beijing.

24/7 Wall Street Key Points:

• Nvidia stock could cool down as the rest of the Magnificent Seven start to get really hot.
• I think Meta Platforms stock could outperform Nvidia over the next three years as the firm pushes ahead on AI.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Nvidia stock gets rattled as its Magnificent Seven peers soar

Undoubtedly, given Nvidia’s dominance in AI accelerators, such competition investigations should come as no surprise. While Nvidia hasn’t formally been ruled a monopolist, it’s certainly hard to compete against a firm that I believe can widen the gap with its peers once Rubin (the successor of Blackwell) lands at some point in 2026.

Indeed, the Blackwell boom hasn’t yet arrived. Still, many investors are already looking ahead to Rubin, which is reportedly as many as six months ahead of schedule, according to a Taiwanese publication named United Daily News (UDN).

Does that mean Nvidia’s Rubin chips will be in for a surprise late-2025 launch? I don’t think so. Either way, such a report seems to suggest that Nvidia is continuing to move at breakneck speed, making the AI leader that much harder to catch as time progresses.

While it’s tough to tell if Nvidia’s blistering pace of advancement is already baked into the stock, I do think that investors may be discounting the risk of potential anti-trust probes. Going into the new year, it’s these regulatory pressures that may act as a pair of brakes for the AI kingpin.

Meta Platforms’ AI engine is really picking up.

As Nvidia looks to re-enter correction territory, I view Meta Platforms (NASDAQ:META) as a firm that will be tough to stop as it gives AI its all. Meta shares are up 83% year to date, but they remain far from expensive, at least in my opinion, at just 24.9 times forward price-to-earnings (P/E). Indeed, some investors may be unenthused by the firm’s rapid spending. As the firm looks to redirect capital work metaverse efforts to AI, though, I do see an opportunity to catch up to the likes of OpenAI in the race for superintelligence.

Just last week, Meta pulled the curtain on its Llama 3.3 model, which is more cost-efficient to run. Going into the new year, it will be interesting to see the performance and efficiency gains of Llama 4.0 and how it stacks up with the top AI models on the market. As the large language model (LLM) race heats up, perhaps investors should brace for a potential passing of the torch.

It’s tough to tell which firm could rise as a winner in a year from now. At this juncture, OpenAI is an arguable favorite. However, Meta’s Llama model cannot be counted out, especially as CEO Mark Zuckerberg gets aggressive with his AI plan. As Zuckerberg remarked in a recent conference call, the coming Llama 4 is trained on a cluster “bigger than anything that I’ve seen reported for what others are doing.”

That’s a big deal. In other words, Meta is flooring it on its AI initiative. And I think it’s just a matter of time (I think three or so years) before the financial payoff arrives.

The bottom line

I’d look for the $1.6 trillion social-media titan to potentially race with Nvidia for market cap glory over the next three years as Nvidia grows into its hefty multiple while Meta looks to maintain a strong pace into the new year.