Meta Platforms, Inc. (NASDAQ:META) just secured a victory in India by having restrictions on the company’s WhatsApp payment service lifted. India is Meta’s largest market by user base and the decision allows the company to now utilize the full potential of this market.
Back in 2020 when WhatsApp Pay was first launched in India, the National Payments Corporation of India (NPCI) imposed a limit of one million users to keep the company’s dominance in check. Later on, this cap was eased to 100 million in 2022. India adopted this careful attitude to maintain scalability, avoid Meta’s monopolistic behavior, and tackle security issues. NPCI also capped the market share for any single entity at 30% at the time.
One benefit of the 100 million cap was that it allowed Meta to fine-tune its platform while the public at large waited for the regulators to ease the restrictions. Now with the cap removal, WhatsApp can onboard all its users to its UPI-based payment service WhatsApp Pay. This will also increase the use of WhatsApp Pay among its massive user base in India, which currently stands at over 500 million.
Currently, PhonePe and Google Pay are the market leaders in India’s Unified Payments Interface (UPI) market, enjoying almost 85% of the market share. Meta’s emergence will increase the competition in the UPI market and will challenge market leaders, especially Alphabet (NASDAQ:GOOG). For the local population, this increased competition will eventually translate to better services.
META has rallied 70% in 2024 and analysts and investors alike have been looking at the next trigger of growth. Easing regulation in the Indian market could help the company diversify its business strength into other markets. Its advertising business is already gaining thanks to massive AI investments, which will continue into the future. However, improved operations in India’s financial landscape could help the company generate non-AI growth in the future, something analysts would love to see.
META is 3rd on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 235 hedge fund portfolios held META at the end of the third quarter which was 219 in the previous quarter. While we acknowledge the potential of META as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article was originally published at Insider Monkey.