Key Points

The Nasdaq Composite technology index has declined 4% from its highest point, with investors pulling back from the artificial intelligence infrastructure expansion.
Meta Platforms' shares are available at an appealing valuation, particularly considering the firm's rapid expansion.
Lemonade is revolutionizing the insurance sector with AI, and its operations show strong momentum.
10 stocks we prefer over Meta Platforms

The Nasdaq Composite index is currently 7.5% below its recent record high, driven by drops in semiconductor stocks central to AI. Concerns over AI spending sustainability may present buying chances for investors.

Meta Platforms is a significant purchaser of AI chips, yet Wall Street could see a spending slowdown positively, allowing the firm to keep more cash flow from its social media ads business. Lemonade, meanwhile, is achieving strong results by applying AI to reshape insurance.

These two stocks are priced attractively at present, which is why they could represent solid long-term opportunities amid recent tech volatility.

Image source: The Motley Fool.

The case for Meta Platforms

Meta controls social media platforms Facebook, Instagram, and WhatsApp, drawing over 3.5 billion daily visitors. With nearly half the global population already reached, growth now focuses on increasing user engagement. Greater daily time spent online means more ad views and higher revenue for Meta.

AI strengthens this approach through recommendation algorithms that identify preferred content and deliver more of it. CEO Mark Zuckerberg notes that newer AI models offer deeper insights into images, videos, and user objectives, enabling superior content suggestions. He expects AI to eventually generate personalized material aligned with individual preferences, turning platforms into tools for life improvement such as learning skills or handling finances, which should drive sustained engagement gains.

Meta reported $56.3 billion in revenue for the first quarter of 2026, up 33% year over year. This pace quickened from 24% in the prior quarter, indicating AI initiatives are delivering results.

Meta shares trade at a price-to-earnings ratio of 21.3, below the Nasdaq-100 index level of 35.3, hinting at relative undervaluation versus large tech peers.

Still, the company plans to invest up to $145 billion in AI data centers during 2026, which may pressure earnings through depreciation. Observers will monitor upcoming quarters for any spending reductions, which could be viewed favorably for profits.

The case for Lemonade

Lemonade provides renters, homeowners, life, pet, and car insurance, relying on AI across customer service and premium pricing. Users begin on the site where an AI chatbot generates quotes in under 90 seconds. Policyholders benefit from another AI tool that settles claims in seconds, far faster than traditional multi-call processes.

Lemonade reached a record 3.1 million policyholders by the end of the 2026 first quarter, a 23% rise from the prior year. In-force premium stood at $1.3 billion, up 32%, marking the tenth consecutive quarter of accelerating growth.

AI automation since late 2022 has cut the workforce by 6% while doubling in-force premium. The firm now generates about $1 million in in-force premium per employee, matching efficiency levels of major insurers despite its smaller scale. Continued progress could position Lemonade as the industry's most efficient operator.

Analyst estimates point to $1.6 billion in 2027 revenue, more than double the 2025 figure of $738 million. This implies a forward price-to-sales ratio of 2.5.

Lemonade stock would need to climb 116% by the end of next year merely to hold its current price-to-sales ratio of 5.4, near its three-year average.

Yet the outlook improves further, as Lemonade targets 670% in-force premium growth to $10 billion over the coming decade, which could support comparable stock gains.

Should you buy stock in Meta Platforms right now?

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Stock Advisor returns as of June 10, 2026.

Anthony Di Pizio holds no positions in the mentioned stocks. The Motley Fool maintains positions in and recommends Lemonade and Meta Platforms. The Motley Fool follows a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.