Big Tech's 2025 Performance: Meta Shines Amidst Challenges

The start of 2025 has been a rocky road for Big Tech. Amazon (AMZN), Google (GOOG), and Microsoft (MSFT) have fallen short of expectations for cloud revenue, Apple (AAPL) has seen a decline in iPhone sales, and Tesla (TSLA) has underperformed on both revenue and earnings. These factors have weighed heavily on stock prices, with Google and Microsoft down 2.7% and 3.3% year-to-date, respectively, and Tesla experiencing a 17% drop. Apple's stock has also declined by 6%, while Amazon has managed a 4.4% gain.

Amidst this performance, Meta (META) stands out as a beacon of success. The social media giant's stock has surged by 22% since the beginning of the year and has enjoyed a 17-session winning streak on Wall Street.

Meta's Edge: Investing in its own Growth

Meta's exceptional performance can be attributed to its strategic focus on leveraging AI investments for its internal operations rather than pursuing external sales. While competitors are spending heavily on AI platforms targeting external customers, Meta's investments are directly powering its own growth.

Meta's CEO, Daniel Newman, believes the company is poised to become the most consequential enterprise of the era due to its unparalleled customer focus.

AI Driving Growth

Meta's AI investments are paying dividends on Wall Street as they significantly enhance the company's ad sales and user engagement on its platforms. "They've used their AI investments to drive their business where other companies have been trying to be everything to everyone," explained Zeus Kerravala of ZK Research.

The benefits of Meta's approach are evident in its early results. CEO Mark Zuckerberg reported that AI is positively impacting all aspects of the company's operations. Zuckerberg highlighted an 8% increase in time spent on Facebook and a 6% rise on Instagram, attributed to improved AI-driven recommendations.

Furthermore, CFO Susan Li noted that the company's generative AI tools are being used by a growing number of advertisers, with a surge from 1 million to 4 million in the past six months.

Open-source Approach as a Long-term Advantage

Meta's open-source approach to AI, with its Llama models, is attracting attention on Wall Street. Industry analysts predict that licensing of Llama could become a significant revenue stream in the future.

Zuckerberg remains dedicated to leading the industry with Llama 4, an innovative multimodal model with agentic capabilities. He anticipates that Llama 4 will "unlock a lot of new use cases."

Monetization Strategies Still Evolving

While Meta's success in AI is evident, the specific path to monetizing Llama remains to be defined. The AI race is still in its early stages, and no clear winners can be declared yet. However, investors are undoubtedly impressed with Meta's approach and the company's potential to revolutionize the industry.