The $3 trillion club is quite exclusive. Since inviting Apple into its halls as its first member in early 2022, only two other companies have stepped through its doors: Microsoft and Nvidia. As of this writing, only Apple has a market cap above $3 trillion.

But it's unlikely Apple will remain the sole member of the elite megacaps forever. Microsoft or Nvidia will likely see their stock prices climb high enough over time to get back in. Several other companies are making their cases for inclusion as well.

One thing that all of these companies have in common, though, is that they're all tied to artificial intelligence (AI). The biggest tech companies are all spending heavily on AI infrastructure and development (much to Nvidia's benefit) in order to advance their businesses into the $3 trillion club.

But one company stands out as a business that can see a huge impact across its products and services from advancements in AI, and it's investing heavily to get there.

That's why Meta Platforms (META -0.36%) could join the $3 trillion club as soon as 2028.

Image source: Getty Images.

How generative AI can take Meta to the next level

Meta is planning a huge step-up in its AI investments this year. Ahead of the company's fourth-quarter earnings report in January, CEO Mark Zuckerberg posted on Facebook about plans for the company to allot between $60 billion and $65 billion for capital expenditures this year. That's a 59% increase from last year at the midpoint.

There's good reason for Meta to spend so heavily on AI. First, it's already seeing great results. The company applied its learning from developing its large language models to its core recommendation algorithm, enabling it to make a more general algorithm. The results are better content recommendations, which has led to increased engagement on its Facebook and Instagram platforms and more ad impressions.

On top of that, Meta is seeing improvements in the value of its ads. Not only are they more relevant due to the improved recommendation algorithm, but Meta's AI tools also are making it easier for marketers to create better, higher-converting ads.

More than 4 million advertisers used Meta's generative AI ad creation tools as of the end of January. Also, average ad prices increased 14% last quarter while the company served more ads to users.

And Meta is just getting started incorporating AI into its products and services. Zuckerberg envisions a future where it has developed an AI agent that can act as a marketing director for a business on the company's platforms.

On the second-quarter earnings call last year, he said, "Advertisers will basically just be able to tell us a business objective and a budget, and we're going to go do the rest for them." It could create hundreds of personalized advertisements and target very small groups with unique messages to enhance conversions.

The company could do the same with user-generated content. Creators could extend the reach of their content with AI-generated translations dubbed over their videos, and Meta could help creators increase engagement by tweaking small parts of their images.

AI could have a huge impact on the company's efforts to monetize WhatsApp and Messenger. It recently launched a beta for Business AIs, which lets small businesses create AI chatbots for customer service and sales on its messaging services. As these AI agents become more advanced and Meta makes it easier to create them, it could be a $100 billion opportunity, according to William Blair analyst Ralph Schackart.

Meta is also working on AI applications including its Meta AI chatbot and its Ray-Ban smart sunglasses. Growing adoption of those products presents opportunities to monetize user engagement in the future.

The growth opportunity is huge, but the stock is a bargain

Meta's advancements in AI put it in a position to continue growing its top line extremely quickly over the next few years. However, the massive amount it's spending on data centers will begin weighing on earnings as depreciation starts showing up on its income statement.

Nonetheless, the company could exhibit strong earnings growth as AI innovations and new products push revenue up faster than the rise in its expenses. With the impact of AI on its core business, the introduction of more agentic AI across its ad creation tools and on WhatsApp and Messenger present significant opportunities well worth the cost. On top of that, the AI chatbot is rapidly approaching management's goal of 1 billion users, at which point Meta has historically looked to monetize a product.

Importantly, its Reality Labs business remains an opportunity to improve profits. It represented a $17.7 billion drag on operating income last year, so just getting that business to break-even could push Meta's total operating margin above 50% from 42% last year.

If Meta produces average revenue growth of about 12% per year over the next five years, and it can expand its operating margin to just 44%, operating income will grow 84% over that period. If Meta maintains its tax rate and investors continue to value it at 26 times forward earnings, that puts its value right around $3 trillion by the end of 2028.

However, Meta is arguably trading at a relative bargain at 26 times forward earnings. Other AI stocks trade for much higher earnings multiples. That leaves quite a bit of wiggle room in the estimates for Meta to reach $3 trillion. Investors may be able to absorb a higher tax rate or slower margin expansion if Meta is showing strong top line growth and returns from its massive AI spending. That provides a lot of confidence the company will join the $3 trillion club by 2028, even if its path includes some ups and downs.