Agentic AI Stocks: Avoid THESE, Buy THIS

So, we already know that Meta has, in my opinion, a lot of upside. But, it's not just in my opinion, it's also on what Wall Street thinks. Just taking Wall Street numbers and applying a very basic multiple to Meta, this stock still has a 43% upside. But, what about a gentic commerce? And what is a gentic commerce, especially because of this Meta Muse moment, going to do to other platforms, Amazon, Google, Etsy, DoorDash, Wingstop? Well, we've got some estimates out now from Deutsche Bank, and we're going to break all of those down. Keep in mind a couple things. Uh number one, my price target for Meta is actually much higher than this. I think Meta's growth is going to be much higher, and and therefore my forecast on Meta uh is is closer to $1,800 as a stock, which means it has more than a double from here. Which, I know, sometimes saying that up front freaks people out, and then it's like, "What? That's crazy. That sounds ridiculous." But, Meta has just gotten very, very cheap, especially when it was bouncing around the $566 level, based on the level of spend and and uh that the company brings in on ad spend. And we'll talk about ads in just a moment. But, uh this, by the way, part of our very old sort of stock platform, uh all of this is getting replaced with a brand new terminal at the end of the year, which we're very excited about. It's a complete rewrite, uh and uh it's it's all part of what we're calling Reinvest One super intelligence in one terminal. You'll be able to get that uh at meetkevin.com. You can get that right now. Of course, the terminal product's not out yet. That's coming towards the end of the year. But, for now, you'd be able to take advantage of the alpha membership, all trade alerts, uh the Reinvest stocks rewrite, the terminal coming out towards the end of the year, the Homes AI platform, everything we offer in one product, all nine courses, the course member live streams, uh a gentic AI products coming for consumers, the business blueprint product coming at the beginning of the year. You get all of that. And we just enabled a firm so you could actually uh, pay for this over 12 months if you wanted to. Not a subscription, you pay once, you get lifetime access. So, what do we got with Meta? Well, what's great about Meta is that Deutsche Bank is just coming out with this analysis here and they're arguing, "Hey, we've still got this massive download wave going on in Meta Muse. We were looking around, it's still number one on the App Store. They're still also running ads on the App Store, which is a beneficiary to Apple or benefit to Apple." I even have the Muse app downloaded and they're running ads to me on the App Store, which I think is kind of funny. Uh, but maybe it's strategic to get you to increase your opens and get you to increase your usage of it. And the really interesting components of this piece here uh, came when we get a little bit deeper into it over here. So, they argue that potentially as much as two and a half to five and a half trillion dollars of spend in the economy, so that would be retail and service addressable market. Uh, 20 or about you know, somewhere around two and a half to five and a half trillion dollars of the 27 trillion dollars that are spent per year or estimated to be spent per year by 2030 could end up going to agentic AI. And one thing that I'd like to note is I actually think these percentages could be low. I think you'll end up spending more than 10% of your capital through agentic AI. They think in scenario one, only 10% will be spent through AI, 15% through AI or 20% through AI. I think all of those might end up being low. Because I think in the future, if you look at furniture or home furnishings you're not going to want to scroll through 50, you know, different couches, for example. You're going to give or will be given, you know, three suggestions by your AI agent. Hey, which one of these is closest to your style? Not that one, not that one. Yeah, okay, maybe that one. Okay, how about three more images that are like that one? And choose from these. Oh, those two are good, but not that one. Oh, well, in that case, you might really like this product from Restoration Hardware or whatever, right? Like that kind of search beats going to 50 different websites and trying to do that yourself. It's a pain in the butt, it's painful, and it actually makes buying stuff painful. And that's why I think if you can actually make buying stuff and spending money when people are making more money, not everybody, obviously, still got this K-shaped economy you're dealing with. You actually turn this into the opportunity to increase not only this level right here, total sales, which is great for companies across the world, great for the economy, but you also increase the adoption level. So, this could actually be much higher. This could be true for furniture, gardening equipment, motor vehicle parts, tombstones, headstones, coffins. We had a whole discussion about that live. Uh office supplies, stationery, gifts, novelty, healthcare products, you know, toilet paper, reams of paper, office supplies, whatever. And so, you know, my thesis is that Google or Meta will end up taking basis points uh as sort of commissions. And so, my initial thought was maybe they'll take, you know, less than a 1% commission. Maybe 50 basis points. That could generate $27 billion uh in uh in commissions, you know, from these levels in total. Which isn't actually that much. But Deutsche Bank has a different view. They actually think Meta could take as much as a 3 to 5% commission. That would be potentially 270 billion dollars of revenue. Now, understand that for a moment. Think I I I want you to like think for a a brief moment. What is an extra 270 billion dollars look like in terms of revenue? Well, imagine you had a company right now that made 270 billion dollars per year. What company do we know that right now makes 270 billion dollars per year? Oh, how convenient. It's Meta. And Deutsche Bank is arguing that take rates on agentic commerce could basically generate 270 billion dollars of extra money. Now, that doesn't mean that Meta is going to get all of this, but you're basically saying a whole extra Meta through agentic AI commerce take rates is up for grabs. And they think Meta's going to take somewhere around 8 to 18% of that. I think it could potentially be more given Meta's three billion daily active users. Keep in mind X, just for comparison, instead of 3 billion daily active users, sits somewhere around 450 million monthly active users. It's still a little bit more niche and and probably the tech or more conservative, you know, communities. That said, uh and then of course Meta's got that global reach as well. That said, that's only one potential portion of revenue because another portion of revenue they argue, which I disagree with, is this idea that people might keep money on their agentic AI platform and companies can invest that float, basically. Sort of like Starbucks can do with your Starbucks gift card money that you're just not spending that 50 bucks that is sitting there times millions of people. It's a lot of money that they can go invest and make money on. I actually think a bigger thing that they haven't really written much about for how much this could move Meta's revenue, which they forecast above consensus. These are the consensus numbers for 2030, $466 billion. They think transaction fees and spread alone could push another $36 billion to Meta's revenue by 2030. I think that's low. Mostly because we haven't even talked about how ads could potentially integrate into this. So, I think a company that ends up paying money to be one of those suggestions on the like the furniture reel, you know, select from these three, select from these, and a company one of them was sponsored. Who cares if it has little sponsored? If you're like, "Yeah, no, I still like that style of that sponsored one." They'll click it. That probably could double the fees that an advertising platform like Meta can make. Really actually exciting. So, I think there's a lot of potential here. Plus, they're arguing that right now their cost per user to actually run uh Meta Muse is somewhere between 300 Sorry, $3.50 to $6.50. So, they're estimating right now that free users cost Meta about five bucks a month, power users 35 a month, and 165 for max tier. Of course, these other two are paid uh you know, tiers for them. So, this is where they break down some of the costs for the companies. Uh they also talk about these, you know, pressures to partner with AI. For example, if at if Expedia partners with Meta, then you might end up pushing booking.com to partner as well because otherwise they they'll end up losing their ability to attract customers. So, you may as well pay Meta to promote yours and partner with them. Totally makes sense. So, what are some stocks that we thought could end up being impacted? Well, Deutsche Bank had a great point where they talk about commoditization getting more extreme. What are things that are commodities that I think of that we buy on a regular basis or a business would buy? Office supplies, dog food, stationery, coffee, toilet paper, whatever. Gaming computers, tires, you know, these are all things that are going to be more commodities, uh which reduce pricing power for those related companies. So, if you're investing in companies that are producing commodities, they might see lower pricing power. Whereas where you might see higher pricing power would be unique things. Gift ideas, unique furniture, custom products, whatever. Deutsche Bank specifically shouts out Etsy and eBay on this. I personally see this as a potential loser for companies like Amazon and Google because they're going to lose some of those sponsored or Google search revenues. And Google search revenue is made up or makes up about over 50 just over 50% of Google's revenue. Also, those extra ads on things like when you check out for DoorDash or Wingstop or whatever, that's going to be a little bit of a loser, I suspect. Uh but a winner on the other side for the ad plays, so while you lose on ads over here, another place you could win on ads would be ads on entertainment platforms that you're going to anyway. TikTok, YouTube, which is part of Google in fairness, Instagram, Netflix, gaming via AppLovin on mobile. And so, this I think is very interesting when we think of it's not just a Meta that wins, but there's the other companies that adopt agentic AI. Who knows? Maybe Amazon, and I'm sure they will, ends up coming out with their own agent. Like, "Hey, just use this Amazon exclusive agent." But do I want to use an Amazon exclusive agent or do I want to use an agent that can look at both Amazon and say Walmart. You know, Muse for example connected with Walmart already and partnered with them. So, it's pretty smart. So, I suspect that Amazon will end up getting pressured into paying commissions to these AI models. And obviously, the risks are to businesses that are high churn thing businesses like an Aura ring, a Whoop renewal, uh a gym you don't go to, whatever. We actually send a daily wealth, which I encourage you to sign up for because it you know, it's free and you also get Sometimes we'll throw price targets in there, but uh we'll also throw in sort of like video digests like, "Hey, we talked about this and this and this video in case you want to see more, watch the video here." And you get some really good takeaways. But in one of our daily wealths, we were talking about how, you know, the ROI of having your own gym or and what it might look like versus paying a subscription to a gym and then not using it versus using your own because it's closer. You could almost pay for your own gym pretty dang quickly depending on obviously what you spend money on. But uh And and this could be in your home or in your garage or whatever. Full thesis was in that. But I encourage you to join us on this. This you could go to meetkevin.com/digest and you could sign up for this email. That's free. That doesn't cost you anything. It's going to stay free. Uh so, check that out. But anyway, going back to the DBP over here, this is very exciting for Meta uh because I think all of these things aid Meta uh in their growth potential. Right now, the growth potential for this company is listed at uh well, right now we've got a 35 PE ratio for the uh sorry, 3505 is the EPS for the end of the year is the current consensus. And then growth thereafter, they only have it listed at consensus growth at 9.5 next year, 21.6, 18.6, and 13 / 4 is about 15.67 uh growth is the average four year. So, if I take Meta at 7:45 today, uh equals they're trading for 21.23-ish times or a PEG ratio of 1.3. I personally think that could that's an easy double. Uh because that would put you at about a 2.6 PEG, and I actually think their growth rate will be higher. So, if I take a higher growth rate, and let's say I take a 20% growth rate, and I multiply that by uh a PEG that's closer to 2.6, I get to my $1,822 price target uh for Meta. But, it's not just Meta that wins, you know, it's other companies that are going to have a little bit more of a headwind, specifically, I think Google. Uh although I do think all ships will lift in this broader boom that we're seeing in the economy, these are things to look at your portfolio on and think, "Huh, okay. How are these going to become little needle movers?" Ultimately, broader economy here, S&P 500 even, all of this is relatively bullish. Because this just feeds all S&P 500 companies, in my opinion. Just bullish S&P 500 and train America velocity of money. You reduce the pain of paying, you increase the velocity of money, you increase GDP. Kind of exciting. So, I'm pretty enthusiastic about that, and uh it does make me quite bullish. Anyway, you want to see more on that, make sure to join us over at mekevin.com join. You pay once, you get lifetime access forever uh on all the products we've got listed at mekevin.com. Which means once we get into 2027, there will not be a lifetime subscription anymore. We're transitioning to a pay for reinvest one, and then it's like an annual renewal that you have to pay for. Maybe you pay for two years up front, you know, whatever. We haven't quite decided yet. But the point is now you buy now you can get trade alerts tomorrow or you can get trade alerts in 10 years. You buy in 2027, you've got that renewing expense coming up if you end up joining in 2020 or after you know, we get to the new year. So consider that. Join us over at meetkevin.com. And with that >> Oh man, [music] your boy Kevin just lost lots of money. Oh, but that's okay. I am [music] with you. With you. Oh man. >> If you like that video, check this one out. I think you're going to love it. >> Why not advertise these things [music] that you told us here? I feel like nobody else knows about this. >> We'll we'll try a little advertising and see how it goes. >> Congratulations, man. You have done so much. People love you. People look up to you. >> Kevin Paffrath, a financial analyst and YouTuber, Meet Kevin. Always great to get your take.