Meta's Winning Streak Ends, AI Investments Prove Promising
Meta Platforms Inc. (META) saw its 20-session winning streak on Wall Street come to an end on Tuesday, with shares plummeting over 2.76%. Despite the setback, Meta's stock remains up 17% over the past month and 22% year-to-date.
Meta's recent success contrasts with the struggles of its Big Tech peers. Alphabet (GOOG), Apple (AAPL), and Microsoft (MSFT) have all experienced declines of over 2% year-to-date, while Tesla (TSLA) is down over 12%. Amazon (AMZN), however, has risen over 3% this year.
Analysts attribute Meta's wins to its robust investments in artificial intelligence (AI). Meta is pouring significant capital into technologies that enhance its advertising business and keep users engaged. The company's focus on AI differs from its rivals, who have adopted a more generalist approach.
Meta's AI initiatives have already yielded positive results. Time spent on Facebook has increased by 8% this year, while Instagram has witnessed a 6% increase. Additionally, Meta's quarterly earnings calls have revealed a surge in advertisers using its generative AI tools, driven by the popularity of OpenAI's ChatGPT.
Investors are also optimistic about Meta's open-source Llama models, which provide a framework for AI development. This move has been validated by the success of AI startup DeepSeek, whose open-source AI model rivals offerings from ChatGPT and other prominent Silicon Valley AI companies.
Analysts believe Meta's AI strategy could generate a steady revenue stream in the future, particularly if large firms license its software. Overall, Meta's emphasis on AI has become a differentiator, contributing to its recent performance despite the broader market headwinds.