Although market volatility has increased recently, Meta Platforms (META), with its strategic deployments in artificial intelligence, advertising business, and smart hardware, as well as Dexcom (DXCM)’s leading position in the continuous glucose monitoring field and its expanding market opportunity, both demonstrate long-term growth potential. For investors who can tolerate short-term fluctuations, these two stocks are worth attention and consideration for long-term holding.
Investors are currently concerned about Meta Platforms’ rising capital expenditures. If these investments do not generate the expected returns, they could squeeze the company’s profits and profit margins, similar to how its massive previous investments in the metaverse largely ended in failure. Furthermore, in the first quarter of this year, the company’s daily active users unexpectedly declined sequentially, dropping from 3.58 billion in the fourth quarter to 3.56 billion.
Because of this, Meta Platforms’ stock price has performed poorly this year. However, this technology giant still has attractive growth opportunities that could deliver substantial returns over the next decade. The following three aspects are worth noting:
First, its core advertising business remains strong, partly due to its investments in artificial intelligence. AI-driven algorithms are enhancing user engagement on its websites and apps and driving advertising sales growth. This work is still in progress and is expected to continue producing positive results.
Second, Meta Platforms is actively deploying agentic AI. The company is working to deploy AI assistants across its various applications to help users, whether individuals or businesses, achieve their goals more efficiently. This not only further increases user engagement but also makes it easier for businesses on the platform to interact with customers and meet their needs.
Third, the company’s smart glasses business is still accelerating. The glasses product itself has low profit margins and is unlikely to become a significant source of profit. However, Meta can sell various subscription services and use the vast amount of data collected from the glasses to optimize its advertising business. Therefore, AI glasses could become another important growth driver for the company. If Meta can successfully execute its strategy in these and other potential growth areas, its current capital expenditures will be completely justified.
Although Dexcom has encountered some challenges in recent years, including product recalls and slower-than-expected revenue growth, the company may have reached a turning point. The well-known activist investment firm Elliott Investment Management recently took a significant stake in the company and will help elect two new members to the board, causing Dexcom’s stock price to rise sharply.
Some investors view this as a strong endorsement of Dexcom’s prospects. Apart from this, the company itself continues to deliver solid financial results. In the first quarter, the company’s revenue grew 15% year-over-year to $1.19 billion, and adjusted earnings per share were $0.56, an increase of 75% from the same period last year.
Dexcom remains a leading company in the continuous glucose monitoring device market. These devices help diabetic patients track their glucose levels in real-time throughout the day. The company still has a huge addressable market in this field, especially with its over-the-counter product Stelo launched in the United States, which targets even pre-diabetic individuals, significantly expanding the market opportunity. Dexcom estimates that more than 9 million patients in the U.S. are eligible for CGM reimbursement but are not yet using related devices.
At the same time, the company is developing newer and better products and expanding its reach by entering new regions. Dexcom expects its organic revenue to grow at an annual rate of 10% by 2030. Given the vast opportunities ahead, the company’s long-term performance remains promising. Even after the recent rally, Dexcom’s current stock price remains attractive.
