Among 517 market transactions in August, America’s president bought $5m-$25m worth of Meta Platforms‘ (NASDAQ:META) stock. Why? Recent history has reminded us that it’s difficult to know what makes ‘The Donald’ tick. But I’d be pretty confident that, like the rest of us who invest in the stock market, he wants to make [more] money.

Unfortunately, we don’t know exactly how much he’s invested. Even so, a commitment of at least $5m (up to $25m) is significant. But was it good decision to part with some of his cash in this way?

A promising start

So far, he’s done well. Since buying on 21 August, the stock’s increased by just over 30% (at 12 October). Indeed, with artificial intelligence (AI) dominating the investment scene, there appears to be a lot of goodwill towards the stock.

And in what could be a major step forward, Meta launched Muse on 8 September, which it describes as “the world’s first personal AI agent”. Instead of answering questions, it’s designed to work for users. As well as, for example, completing forms and making travel bookings, it can “take on big audacious goals”.

In the spirit of AI, I asked ChatGPT what these might be. It suggested building a major political campaign and launching a business as some of the app’s capabilities. Admittedly, these are big tasks. This probably explains why Muse was the most popular downloaded free app in America in September.

This month, Donald Trump hit the headlines when he called for AI to be renamed ‘Super Intelligence’. He’s clearly been reading one of the group’s recent press releases. It said: “Meta thinks personal superintelligence will be one of the most transformative technologies of a lifetime.”

Other revenue streams

As a reminder of the power of Meta’s brands, Instagram and WhatsApp, were ranked fourth and ninth respectively in the league table of downloads. And despite being around for ages, Facebook was 11th. No wonder the group reported revenue of $60.8bn and earnings of $15.8bn during the three months ended 30 June.

What could go wrong?

Of course, the biggest challenge facing Meta is to stay relevant. Ironically, as AI evolves, it will become easier for others to copy what it does. I wonder if Muse could help others undermine its own existence?

Having said that, the group expects capital expenditure of $130bn-$145bn this year. Few are able to match this. In the world of technology, first-mover advantage is a thing. Just look at Facebook.

But could this also be its downfall? It’s having to borrow to fund some of its capital projects. And we don’t know what the return on this investment will be. Its long-term debt-to-equity ratio is now higher than five of its six ‘Magnificent 7’ peers. And the group’s likely to face more social media bans for children.

Final thoughts

However, Trump appears convinced that the group can overcome these challenges. And I’m inclined to agree with him. The stock doesn’t look particularly expensive when forward earnings are taken into account. And a quick look at its stock price chart shows a remarkable track record.

On this basis, I think it’s a growth stock to consider. But it’s not the only one that’s grabbed my attention recently…

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James Beard does not hold any positions in the companies mentioned.