Artificial intelligence (AI) has become the defining force in both technology and economics. With President Donald Trump signing the sweeping One Big Beautiful Bill Act into law, US corporations now enjoy powerful new incentives. The nearly 900-page legislation cements a permanent 21% corporate tax rate and repeals mandatory R&D amortization, allowing immediate deduction of research expenses.
For Nvidia (NASDAQ: NVDA) and Meta Platforms (NASDAQ: META), two leaders of the AI revolution, these changes couldn’t come at a better time. Both companies are already investing billions into AI development while also repurchasing shares at a record pace. With tax burdens reduced and R&D treatment improved, they are primed to deliver even stronger returns for shareholders.
This analysis explores why these two AI titans stand out as the most compelling opportunities in today’s policy-driven market.
Policy Tailwinds That Reshape AI Investing
The legislation includes two core advantages for AI-focused firms:
- Permanent 21% Corporate Tax Rate
- Prevents a reversion to the old 35% rate.
- Protects profit margins and keeps capital free for buybacks and reinvestment.
- Immediate Expensing of R&D
- Companies can now deduct AI research spending upfront, reducing taxable income in the same year.
- Encourages bold, long-term innovation by lowering the cost of experimentation.
Together, these measures enhance both short-term earnings and long-term competitiveness—an ideal environment for Nvidia and Meta.
Nvidia: The Backbone of the AI Economy
Nvidia’s fiscal 2026 Q2 results underscored its dominance:
- Revenue: $46.7B, up 56% YoY.
- Non-GAAP EPS: $1.05, up 54%.
- Growth Drivers: Data center demand and automotive chips.
The launch of the Blackwell GPU cemented Nvidia’s position as the gold standard in AI computing. Beyond hardware, Nvidia delivers pretrained AI models, CUDA software, and developer tools—creating a moat that rivals cannot easily replicate.
Customer Ecosystem:
- Tesla trains its self-driving AI on Nvidia GPUs.
- Waymo and Amazon Zoox rely on Nvidia hardware and software for autonomous systems.
- Cloud providers use Nvidia GPUs to train and scale generative AI applications.
Geopolitical Catalyst: Trump’s reversal of chip export restrictions reopens opportunities in China, with Nvidia preparing products like the H20 GPU and potentially scaled-down Blackwell variants for that market.
Outlook: Analysts expect Nvidia’s earnings to grow 34% annually for the next three years. Though it trades at 58x earnings, its unmatched role in powering AI makes the premium justifiable for long-term investors.
Nvidia vs. Meta: Growth Potential vs. Valuation
Meta Platforms: AI-Enhanced Engagement and Monetization
Meta’s Q2 results demonstrated resilience and growth:
- Revenue: $47.5B, up 22% YoY.
- GAAP EPS: $7.14, up 38%.
- Operating Margin: Expanded by 5 points.
Meta controls three of the four largest social platforms—Facebook, Instagram, and WhatsApp—drawing over 3B daily users. This user base not only fuels advertising power but also provides data for AI-driven personalization.
AI in Action:
- Recommendation upgrades boosted Facebook usage by 5% and Instagram by 6%.
- Threads and WhatsApp are introducing ads, adding fresh monetization streams.
- Meta AI, with over 1B monthly users, remains an untapped revenue frontier.
Outlook: With ad spending forecasted to rise 14% annually through 2030, Meta is well positioned. Analysts expect 17% EPS growth annually over the next three years, at a modest 27x earnings—far cheaper than Nvidia.
Why These 2 Stocks Shine Under Trump’s Policy
- Nvidia: Supplies the backbone of AI hardware and software, benefiting from both domestic demand and renewed China access.
- Meta: Uses AI to deepen user engagement and create new advertising opportunities across multiple platforms.
- Both: Lead the S&P 500 in share buybacks, which will accelerate under the lower tax regime.
Together, these firms capture both sides of the AI equation: infrastructure and application.
Nvidia vs Meta: Share Buybacks and R&D Spending
Risks Investors Must Watch
- Nvidia: High valuation + cyclical semiconductor industry.
- Meta: Regulatory scrutiny on privacy, antitrust, and content moderation.
- Macro factors: US-China relations, potential trade barriers, and AI regulation remain unpredictable.
These risks make both stocks better suited for investors with a multi-year horizon.
Conclusion: AI Leaders Built for Policy-Boosted Growth
The intersection of policy reform and AI innovation has created a unique investment moment. Trump’s tax and R&D incentives align perfectly with the strategies of Nvidia and Meta, two companies already reshaping global technology.
Nvidia dominates AI infrastructure, from GPUs to data centers, while Meta leverages AI to amplify engagement and advertising across its unmatched social ecosystem. Together, they embody the dual engines of the AI economy—hardware and software, infrastructure and application.
For investors seeking exposure to the most transformative trend of our time, these stocks are not just “buys”—they are strategic holdings for the next decade of growth.
Reference : Trevor Jennewine