Jim Cramer Sees Meta and Shopify as Undervalued AI Plays With 36% and 55% Upside

TL;DR: Jim Cramer highlighted Meta (META) and Shopify (SHOP) as undervalued AI‑driven stocks, citing median analyst price targets that imply 36% and 55% upside from current levels.

Context: Meta’s stock is down about 24% from its yearly high as investors worry over the company’s plan to spend up to $145 billion on capital expenditures this year, largely for AI infrastructure. Shopify’s shares have fallen roughly 46% from their peak after the firm issued softer‑than‑expected full‑year guidance, even though its first‑quarter results showed strong growth. Cramer, a former hedge fund manager who averaged 24% annual returns over 14 years, said impatient and frightened investors have discarded these names, creating attractive entry points.

Key Facts: Among 72 analysts, Meta’s median price target is $817.50 per share, which represents a 36% increase from its current $600 share price. Among 53 analysts, Shopify’s median target is $150 per share, implying a 55% rise from its present $97 price. Meta’s market capitalization exceeds $1.2 trillion, while Shopify’s is around $70 billion. Meta’s first‑quarter ad impressions rose 19% and average price per ad climbed 12%, helping revenue jump 33% to $56.3 billion and net income per diluted share increase 62% to $10.44. Shopify reported first‑quarter revenue of $3.1 billion, a 34% increase, with adjusted net income up 44% to $0.36 per diluted share; AI‑driven traffic to its stores grew eight‑fold year‑over‑year and orders from AI‑powered searches rose nearly 13‑fold.

What It Means: Meta is using AI to power recommendation engines and its Meta AI assistant, including a shopping mode that scans Facebook Marketplace and the wider web, aiming to deepen engagement and ad effectiveness. Shopify’s AI suite, Shopify Magic, automates content creation and storefront design, and its Universal Commerce Protocol with Google enables agentic commerce across ChatGPT, Microsoft Copilot, and Google platforms. Analysts expect Meta’s earnings to grow about 14% annually through 2027, justifying a forward price‑to‑earnings ratio near 22, while Shopify’s adjusted earnings are projected to rise roughly 29% per year through 2028, supporting a valuation around 63 times adjusted earnings. Both companies are betting that AI will sustain or accelerate their current growth trajectories despite near‑term market skepticism.

What to watch next: Meta’s upcoming AI product updates and capital‑expenditure reporting, plus Shopify’s progress on agentic commerce adoption and any revisions to its full‑year guidance.