Meta's Stock Performance Amidst Tech Sector Wobbles
Meta Platforms (META) experienced a decline in its stock value on Tuesday, jeopardizing its impressive 20-session winning streak on Wall Street. Shares of the social media giant plunged by over 3.8%. This positive trend had persisted since mid-January, even through President Trump's inauguration, which CEO Mark Zuckerberg attended, and the company's earnings report on January 29.
Despite the recent setback, Meta's stock remains up 17% over the past month and 22% year-to-date. The company's stock has continued to rally despite Zuckerberg's announcement of increased capital expenditures for AI data centers, with plans to spend up to $65 billion this year, a significant jump from the $40 billion projected for 2024. Zuckerberg has disclosed plans to construct a vast data center in Richland Parish, Louisiana, comparable in size to a substantial portion of Manhattan.
Meta's gains contrast with the struggles faced by its Big Tech counterparts in the early weeks of 2025. Shares of Google parent Alphabet (GOOG, GOOGL), Apple (AAPL), and Microsoft (MSFT) have each declined by more than 2% year-to-date, while Tesla (TSLA) has witnessed a drop of over 12%. Amazon's (AMZN) stock, while up more than 2% year-to-date, has declined by 2% over the past month.
Meta benefits from several competitive advantages, primarily its successful investments in artificial intelligence (AI). "Meta has primarily utilized its AI investments to drive its core business, whereas other companies have attempted to cater to a wider audience," said Zeus Kerravala, founder and principal analyst at ZK Research, in a recent interview with Yahoo Finance.
Meta has invested heavily in AI-powered technologies to enhance its advertising business and maintain user engagement. Zuckerberg noted during the company's Q3 earnings call in October, "Improvements to our AI-driven feed and video recommendations have resulted in an 8% increase in time spent on Facebook and a 6% increase on Instagram this year alone."
Moreover, CFO Susan Li disclosed during the Q4 earnings call that over 4 million advertisers are currently utilizing Meta's generative AI tools to create advertisements, a significant increase from 1 million reported six months earlier. These advances have made AI investments more appealing to investors.
Meta has also gained momentum from the AI startup DeepSeek, which recently unveiled its open-source AI model, claiming it rivals the capabilities of ChatGPT and other leading Silicon Valley AI companies. DeepSeek's open-source approach aligns with Zuckerberg's decision to offer Meta's Llama models on similar terms.
Analysts believe that this strategy could generate a steady revenue stream in the future as larger firms adopt and license the software.