AI Spending to Soar 600%: Two Underrated Stocks for September

Published Date : 4/9/2025 

While Nvidia and Palantir have been the go-to choices for AI investments, investors should also consider Meta Platforms and Pure Storage, which are poised to benefit significantly from the AI boom. 

Morgan Stanley analysts predict that artificial intelligence (AI) spending across infrastructure and software will surge more than 600% by 2028. While buying stock in Nvidia and Palantir has been a popular strategy to capitalize on this trend, investors should also consider Meta Platforms (NASDAQ: META) and Pure Storage (NYSE: PSTG).

Most Wall Street analysts have a favorable outlook on these companies. Meta Platforms has a median target price of $875 per share, implying a 19% upside from its current share price of $735. Pure Storage, on the other hand, has a median target price of $80 per share, suggesting a 4% upside from its current price of $77.

Here’s why these AI stocks are excellent long-term investments.

Meta Platforms owns three of the four most popular social media networks, as measured by monthly active users. This dominant position gives the company valuable insights into consumer preferences, which helps it target media content and advertising. Meta Platforms is the second-largest ad tech company globally, and it is positioned to gain market share, according to Morningstar.

The company has been aggressively investing in AI, including custom chips, Llama large language models, and machine learning models to recommend content. These efforts are paying off. Users are spending more time on Facebook and Instagram, and ad conversion rates are increasing across both platforms.

Even more ambitiously, Meta aims to automate the entire ad creation process by next year. The Wall Street Journal recently reported, 'Using the ad tools Meta is developing, a brand could present an image of the product it wants to promote along with a budgetary goal, and AI would create the entire ad, including imagery, video, and text.'

As a result, Meta has a strong chance of delivering double-digit revenue growth for several years to come. Ad tech spending is forecast to increase at 14% annually through 2032, so Meta could report even faster revenue growth during this period if it gains market share. Additionally, the company has a significant opportunity in the nascent smart glasses market.

Pure Storage, on the other hand, develops enterprise storage systems that provide the highest density and lowest power consumption in the industry, making them ideal for AI. The company’s innovative solutions are well-suited for the data-intensive demands of AI applications, which require vast amounts of storage and processing power.

Investors should consider both Meta Platforms and Pure Storage for their potential to benefit from the AI boom. With strong market positions and innovative AI strategies, these companies are well-positioned to deliver substantial returns in the coming years. 

Frequently Asked Questions (FAQS): 

Q: What is Morgan Stanley's prediction for AI spending?

A: Morgan Stanley estimates that AI spending across infrastructure and software will increase more than 600% by 2028.

Q: Why should investors consider Meta Platforms?

A: Meta Platforms owns three of the four most popular social media networks and is aggressively investing in AI, which is improving content recommendations and ad conversion rates.

Q: What is Pure Storage's competitive advantage in the AI market?

A: Pure Storage develops enterprise storage systems that provide the highest density and lowest power consumption, making them ideal for the data-intensive demands of AI applications.

Q: What is Meta Platforms' target for automating ad creation?

A: Meta Platforms aims to automate the entire ad creation process by next year, allowing brands to provide an image and budgetary goal, and AI will create the entire ad, including imagery, video, and text.

Q: What is the forecast for ad tech spending?

A: Ad tech spending is forecast to increase at 14% annually through 2032, providing a strong growth opportunity for Meta Platforms if it gains market share. 

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