The tech company is increasing its spending on AI.
When investors think of potential winners in artificial intelligence (AI), they may think of companies driving the revolution through tools like chips, or companies offering such products and services to others through cloud platforms. name like chip leader Nvidia and the cloud giant Amazon It comes to mind.
But while most investors won’t immediately call it an AI company, another company is also becoming a powerhouse in the AI world. Instead, they will probably consider that their main source of revenue and call it a social media business. Could this player be the most misunderstood AI stock on the market? Zoom in to clear up the confusion.
Image source: Getty Images.
social media giant
The company I’m talking about is meta platform (meta 0.09%)From Facebook to Instagram, it owns some of the world’s most popular social media platforms. Meta has built a long track record of success thanks to this business. The company generates billions of dollars in revenue when advertisers place ads for their products and services on these apps. That’s where advertisers know they’ll find us, especially since 3.5 billion people use at least one Meta app every day.
But in recent years, Meta has expanded its focus to another area: AI. The company doesn’t sell chips to other companies like Nvidia, nor is it a cloud provider like Amazon. But Meta developed its own chip and built a data center for its own AI workloads. In addition, a large-scale language model, Llama, has also been created and made available to others. The company has been increasing its spending on AI in recent years, and AI has become a hot topic.
Meta expects full-year capital spending in 2025 to be in the range of $70 billion to $72 billion, higher than previously expected, and said the AI ramp-up should put “upward pressure” on capital spending in 2026.
Today’s changes
(-0.09%) $-0.55
current price
$620.25
Key data points
Market capitalization
$1.6 trillion
daily range
$620.08 -$629.08
52 week range
$479.80 -$796.25
volume
17M
average volume
18M
gross profit
82.00%
dividend yield
0.34%
Keep users in the app
One question investors may have is what this focus does to the meta. Meta’s effort is to add more features to apps than just virtual assistants, the idea being that this will help us keep using these apps for longer periods of time and encourage us to use them more often.
In either case, spending more time on Meta’s apps means more time for advertisers and potentially more revenue for the company. But that’s not all. Meta also aims to revolutionize advertising through its AI efforts to quickly and easily create engaging ads for advertising customers. This should also increase ad spend across the meta.
Finally, Meta’s AI research could lead to other innovations in the future and expand its revenue streams.
Today, some may misunderstand the meta and wonder why the company is investing so heavily in AI. But those who buy Meta stocks because of these potential benefits may be able to win with Meta in the long run.
