The fool takes
Social media giant Meta Platforms is using artificial intelligence technology to increase efficiency and enhance its competitive advantage. However, the country is spending so much on AI that some investors took issue with its third-quarter earnings report, sending shares down.
But the results weren’t bad at all. Revenue rose 26% year over year to $51.2 billion. Meta’s base of daily active users across Facebook, Instagram, WhatsApp, Messenger and Threads increased 8% to 3.54 billion people. However, operating costs rose 32% to $30.7 billion. Meta has spent a lot of money on employees with AI skills and on building out AI data centers.
But the company is already reaping the benefits of its previous investments. CEO Mark Zuckerberg noted, “our AI recommendation systems deliver higher quality and more relevant content, which led to 5% more time spent on Facebook in the third quarter and 10% more time spent on Threads.”
Given the tremendous opportunity presented by AI and Meta’s ability to capitalize on its AI spend, the recent share price decline presents a buying opportunity for long-term believers. The stock appears attractively valued, with a recent forward-looking price-earnings ratio (P/E) of 22.5. (The Motley Fool owns shares of and recommends Meta Platforms.)
Ask the fool
From NC, Cleveland, Ohio: What happens if I can’t pay my taxes this year?
First, understand that filing your tax return and paying your taxes are different things. Regardless of whether you can pay, you must still file your tax return on time. There are fines for not filing a return as well as for not paying, and in the first months the fine for not filing a return is greater. So file your tax return on time and pay as much as possible to keep fines and/or interest charges to a minimum.
If you are unable to pay the full amount on time, you may be able to set up a short- or long-term payment plan at IRS.gov/paymentplan. If that doesn’t work, you can also request an installment agreement by filing Form 9465, Installment Agreement Request, with the IRS.
Another option is an “offer in compromise,” where the IRS accepts less than the full amount you owe. These are determined on a case-by-case basis, taking into account the circumstances of each taxpayer. A bank loan is also an option, and one that may cost less than you would pay in IRS interest and penalties.
You can also try calling the IRS at 800-829-1040 to discuss your situation and learn more about your options. But keep in mind that the agency, like much of the U.S. government, has undergone staff reductions, and more may follow. This can make it more difficult to reach customer service representatives. The prolonged federal government shutdown also limited the IRS’s activities.
From PF, Portland, Oregon: What is collateral?
Collateral is property or assets used to ‘secure’ a loan. For example, with a mortgage, the home itself is the collateral, and you can lose it if you default on the loan. Some debts, such as credit card debts, are ‘unsecured’.
The School of Fools
Many people invest all their stocks through workplace-sponsored retirement accounts, such as 401(k)s. However, if you want to spend even more money, consider setting up an account with a brokerage firm, which allows you to invest in individual stocks, mutual funds, and/or exchange-traded funds (ETFs). For the best results, take a closer look at a few brokers to see which one will serve you best. Here are some factors to consider:
Costs: Many major brokers now offer free trading on most stocks and ETFs. Depending on what you plan to buy and/or sell, see what each prospective broker will charge you.
Research: Many brokers give you access to in-depth research reports on a wide range of investments, completely free. If you prefer certain sources, such as FactSet, Morningstar, S&P Global or Zacks, see what each prospective broker has to offer.
Education: If you want to know more about investing, take a look at the offers from different brokers. Some even offer online webinars on stocks, bonds, economics and more.
Mobile Apps: Some brokers’ apps are more complete and user-friendly than others.
Investment funds: If you plan to invest in mutual funds, you can usually do so through each fund’s website, but it may be more convenient to do so through your brokerage. So look at how many funds and which fund families (such as Vanguard, Fidelity or Schwab) are available.
Banking: Some brokers offer banking services such as checking accounts and mobile bill payments.
Ease: Some brokers are internet only, which is fine for many people. But if you want to visit a physical office, see which brokers offer one near you.
You can find reviews and comparisons of good brokers at fool.com/money/buying-stocks. You can also search online for terms such as ‘compare brokers’ or ‘best brokers’.
My smartest investment
From TH, via email: One of my smartest investing moves came about thanks to my son-in-law. He told me about the company Axon Enterprise, which supplied body cameras to his police department in the big city, and he suggested I buy the stock. I bought 100 shares for $21 each.
Sadly, he was killed by a drunk driver months later, and I didn’t look at that Schwab report again for years. When I finally did, I discovered that the stock had risen to $800 per share! I kicked myself because I didn’t trust him anymore. I miss him, but he gave me one last parting gift.
The Fool answers: We are saddened to hear of your son-in-law’s untimely death, but you are right to appreciate the gift he gave you. Your investment of approximately € 2,100 has grown into an investment worth € 80,000! (Since the stock recently traded near $557 per share, your stake today would be worth about $55,700.)
Axon has benefited greatly as many law enforcement units have purchased their body camera technology, software, Tasers, drones and more. The company is also introducing body cameras for business use, which could fuel even more growth.
(Do you have a smart or regrettable investment move you’d like to share with us? Email it to [email protected].)
Who am I?
My roots go back to 1913, when the Rapp Motorenwerke company started producing aircraft engines. In 1922, the company Gustav Otto Flugmaschinenfabrik took over my activities. Soon I was making motorcycles, and in 1928, cars.
I started making jet engines during World War II. In 1995 I started building my Roadster cars in the US, in South Carolina.
Today, based in Munich and with a recent market value of almost $60 billion, I am home to my eponymous brand, as well as Mini Cooper and Rolls-Royce. (I also briefly owned the Land Rover brand.) By 2024, I sold 2.7 million vehicles.
Who am I?
Forgot last week’s question? Find it here.
Last week’s answer: Broadcom
