The Stock Behind Meta’s Next Big AI Buildout

By Corbin Buff, Financial Writer and Stock Researcher
December 12, 2024 4:13 PM UTC
The Stock Behind Meta’s Next Big AI Buildout

Meta (NASDAQ: META), the parent company of Facebook and Instagram, recently announced a massive $10 billion subsea fiber-optic cable project to keep up with its growing user base and booming AI ambitions. 

This cable will stretch over 40,000 kilometers—basically wrapping the globe—and ensure Meta has the speed and bandwidth needed for AI and other data-hungry tech:

Source: TechCrunch

While Meta hasn’t officially named the companies involved, firms like TechnipFMC (NYSE: FTI), which specializes in subsea technology, are well-positioned to benefit from the growing demand for projects like this.

Here’s why FTI, which has a Zen Rating of B, is worth a closer look as these subsea AI projects ramp up:

FTI’s Role in the Subsea World

FTI is a leader in subsea infrastructure, known for innovative solutions like the Odassea™ subsea fiber-optic service, which it recently launched with Halliburton (NYSE: HAL). 

This tech isn’t just for energy projects; it’s also perfect for massive data-transfer setups like Meta’s. Companies like FTI are the unsung heroes behind the scenes, connecting the dots for projects that power the internet, AI, and cloud computing.

AI is all about crunching insane amounts of data, and that means we need faster, more reliable ways to move that data around the world. Subsea cables are the backbone of this process, carrying nearly all of the world’s internet traffic. 

In fact, more than 95% of all the data that moves around the world goes through these undersea cables.

So as AI continues to grow, the demand for new, high-tech cables—like Meta’s—is only going to skyrocket.

There’s also a consistent need to maintain these cables … not just install them. More stories are coming out about subsea cables being cut or damaged and causing large internet outages:

Source: Reuters

These repair jobs create more consistent demand for FTI’s services.

FTI Stock Analysis 

Top analysts are bullish on FTI, giving the stock a consensus Strong Buy rating. 

Even the minimum forecast for FTI implies a 16+% return in 2025.

Click here to see analyst price targets for FTI.

In our own work, FTI has a Zen Rating of Buy (B) … and stocks with this rating had an average return of +19.88% per year.

The stock also scores an A in terms of Sentiment. You can see FTI’s other Component Grades here.

Valuation could also be attractive relative to both the broader market and FTI’s industry peers:

  • FTI is good value based on its earnings relative to its share price (19.44x), compared to the US market average (29.58x)
  • FTI is good value based on its earnings relative to its share price (19.44x), compared to the US Oil & Gas Equipment & Services industry average (20.26x)

Click here to analyze FTI fundamentals.

Bottom Line

While Meta hasn’t confirmed who’s building their cable, FTI’s expertise in this field positions them to benefit from the rising popularity of subsea projects. The more companies invest in AI and global connectivity, the more opportunity firms like FTI will have.

Subsea cables are a big deal for keeping the internet and AI running smoothly, and Meta’s latest project is proof this tech is only getting more important. Keep an eye on FTI—they’re at the center of where tech and infrastructure meet.

What to Do Next? 

Want to get in touch? Email us at news@wallstreetzen.com.

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