Meta Stock Falls Amid Positive Tech Sector, Despite AI Investments
Meta Platforms (META) saw a decline in its stock price on Tuesday, breaking a 20-session winning streak. The social media giant's shares dropped by over 2.76%, marking its worst performance since December 18, 2022.
Despite this setback, Meta's stock remains up by 17% over the past month and 22% year-to-date. This positive trend has continued even after CEO Mark Zuckerberg announced significant investments in AI data center infrastructure, with plans to spend over $65 billion this year.
Meta's success contrasts with the struggles faced by other Big Tech companies in early 2025. Shares of Google parent Alphabet (GOOG, GOOGL), Apple (AAPL), and Microsoft (MSFT) have all declined by more than 2% year-to-date, while Tesla (TSLA) has fallen by over 12%. Amazon's (AMZN) stock has risen by over 3% year-to-date but has lost 1.7% over the past month.
Meta's resilience is attributed to several factors, including its investments in artificial intelligence (AI). Analysts believe that Meta's AI initiatives have yielded better results compared to its rivals like Google and Microsoft.
"They've used [their AI investments] largely to drive their business where ... other companies have been trying to be a little bit more all things to all people," said Zeus Kerravala, founder and principal analyst at ZK Research.
Meta has focused on applying AI to enhance its advertising business and user engagement on Facebook and Instagram.
"Improvements to our AI-driven feed and video recommendations have led to an 8% increase in time spent on Facebook and a 6% increase on Instagram this year alone," Zuckerberg stated during the company's Q3 earnings call in October.
Moreover, Meta has received support from the AI startup DeepSeek, which introduced an open-source AI model that challenges ChatGPT and other top Silicon Valley AI companies. This move aligns with Meta's decision to make its Llama models open source.
Analysts anticipate that Meta's AI strategy could translate into revenue growth if larger firms license its software solutions.