Nvidia or Meta: Which AI Stock is a Better Buy?

Nvidia has become the primary provider of chips for AI, leading to significant sales and earnings growth. Meta is investing heavily in AI research, aiming to be a leader in the field. AI stocks have recently performed well for investors.

Nvidia and Meta Platforms are both focused on reshaping the future with AI. Which one is the better AI investment?

Nvidia's AI Dominance

Nvidia has become a key provider of hardware and services for AI platforms, particularly its graphics processing units (GPUs). These processors are top-performing and best-selling. Demand from cloud infrastructure and tech companies has led to substantial sales growth.

In fiscal year 2025, Nvidia's revenue increased by 114% to $130 billion, while net income rose by 145% to nearly $73 billion. Nvidia's GPUs are used for training large language models (LLMs) and inferencing.

Nvidia is also involved in AI agent design, autonomous vehicle systems, and drug-discovery platforms. The company is releasing new chip architectures every year to stay competitive and is expected to remain a major player in AI's evolution.

Meta's AI Ambitions

Meta's core social media apps include Facebook, Messenger, WhatsApp, and Instagram. While advertising sales have been a major revenue source, Meta is now focused on AI. The company has developed its own LLM, Llama, and made it open source to encourage collaborative development, which could help Meta become an AI leader.

Meta plans to invest up to $72 billion this year to enhance its AI capabilities. It has recently launched Meta Superintelligence Labs to work on foundation models like Llama and other AI research. According to Meta CEO Mark Zuckerberg, Meta's strong business and experience can support significant computing power and product development.

Valuation and Investment Opportunity

Meta's stock might appear cheaper based on forward earnings estimates. However, while Nvidia's valuation has decreased since the start of the year, Meta's has increased. Nvidia's strong growth and broad involvement in AI make it an appealing buying opportunity. Meta could also become a major AI player, and its stock remains reasonably priced. However, Nvidia is currently the key player and a better buy at its current valuation.