US stock exchanges are home to seven companies with a valuation of $1 trillion or more, but only five are currently part of the exclusive $2 trillion club:
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Apple: $3.38 trillion
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Nvidia: $3.32 trillion
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Microsoft: $3.05 trillion
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Alphabet: $2.10 trillion
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Amazon: $2.07 trillion
I think Metaplatforms (NASDAQ: META) could be the next company to join that list. The social media giant is quickly becoming a leader in the artificial intelligence (AI) race and is using that technology to create exciting new features for Facebook, Instagram and WhatsApp.
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Meta has a market cap of $1.45 trillion, so its shares need to rise 38% from here for the company to cross the $2 trillion mark. Here’s how it could happen in 2026.
Meta has the largest audience in the world with 3.29 billion daily active users across its suite of apps. The company generates most of its revenue by selling ad spaces to companies looking to reach that audience, and the longer each user spends on platforms like Facebook and Instagram each day, the more ads they’ll see. That translates into more revenue for Meta.
AI-based content recommendations are one of the ways the company is driving engagement. AI algorithms learn what each user likes to see, and manage their Facebook and Instagram feeds accordingly. Meta CEO Mark Zuckerberg says this strategy has led to an 8% increase in the amount of time users spend on Facebook this year, and a 6% increase for Instagram.
Meta also offers a range of AI tools for advertisers, helping them quickly create engaging campaigns. Zuckerberg says more than 1 million companies used AI to create 15 million ads last month alone, leading to a 7% increase in conversions. Meta’s goal is to eventually have a prompt-based system where companies can describe the type of ad they want to create, and the audience they want to reach, and AI will handle the entire process. That could turn even the smallest company into a marketing powerhouse.
Part of increasing user engagement and attracting advertisers also involves creating new features. Earlier this year, Meta launched an AI-powered virtual assistant called Meta AI, which users can access through any of its apps. It’s capable of answering complex questions, generating images, and can even join your group chat to settle debates or recommend fun activities.
Meta AI has already amassed over 500 million monthly active users. But more importantly, it lays the foundation for future features such as Business AI, which will provide every trader in Meta’s apps with a unique virtual agent. Business AI will process incoming messages from customers and possibly even process sales, which will create new opportunities for Meta to generate revenue.
Meta generated a record $40.6 billion in total revenue during the third quarter of 2024 (ended September 30). It also delivered $15.7 billion in net revenue (profit), which was another record, and that figure was 35% higher than the same period last year.
Increasing profitability has been the main driver behind the 527% rise in Meta stock since bottoming in October 2022. However, the company plans to invest heavily in AI data centers and graphics processing units (GPUs) from vendors like Nvidia , which could be an important step. headwinds for its earnings.
Features like Meta AI are powered by the company’s Llama Large Language Model (LLM), which is quickly becoming one of the most advanced in the entire industry. Current Llama 3 models are trained on about 16,000 GPUs, but Zuckerberg says Llama 4 is already in the works and will require more than 100,000 Nvidia’s H100 GPUs (or equivalents).
Nvidia’s chips can often sell for as much as $40,000 each, so Meta is making a huge financial commitment. In fact, the company told investors that capital expenditures (primarily related to AI) for all of 2024 will be between $38 billion and $40 billion – and that forecast has been increased four times this year. The company plans to spend “significantly” more by 2025.
Meta generated $21.23 in earnings per share over the last four quarters, and based on the share price of $567 at the time of writing, that equates to a price-to-earnings (P/E) ratio of 26.8.
That means Meta shares would need to rise 20.5% to trade in line Nasdaq-100 technology index, which has a price/earnings ratio of 32.3. Given Meta’s record financial results, combined with its leadership in the AI race, I think it’s reasonable to expect the company to act in line with its peers in the technology sector.
After all, Meta’s average price-to-earnings ratio over the past ten years is 37.7.
If Meta’s price-to-earnings ratio rises to 32.3, that alone would increase its market cap to $1.75 trillion. Furthermore, Wall Street analysts (according to Yahoo!) expect that despite all its spending, the company will generate 14.2% earnings growth in 2025, which would result in a market cap of $1.99 trillion if it were to maintain the same price-to-earnings ratio.
That means any earnings growth in 2026 would propel Meta into the $2 trillion club. Depending on how quickly it can start making money with features like Meta AI and Business AI, the company could even get there next year, as that could be a source of upside for Wall Street’s earnings forecasts.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no positions in the stocks mentioned. The Motley Fool holds positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
1 Unstoppable Stock That Will Join Nvidia, Apple, Microsoft, Amazon and Alphabet in the $2 Trillion Club by 2026 was originally published by The Motley Fool
