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Nvidia CEO praised how Meta is incorporating AI into its social media services.
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META stock has rebounded after falling 7% in the past three sessions.
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Stock Tweet sentiment for META was “bullish”.
Meta Platforms shares rose nearly 1% in premarket trading on Wednesday, apparently helped by Nvidia CEO Jensen Huang’s endorsement of the social media giant’s AI strategy.
“No one can leverage AI better than Meta,” Huang said in an interview with CNBC on Tuesday.
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“AI has gone from classic recommender systems running on CPUs to generative AI, agent systems that now make recommendations. Everything from how social media works to how we recommend ads and help create appetizer content has fundamentally changed. Their returns show it. That’s why they’re investing so hard, and they just see a much bigger future in AI.”
The move comes after META stock has fallen 7% in the past three sessions. Stocks have fallen more than 9% since the beginning of the year, and some investors are starting to question the stock’s outlook as big tech companies come under increased scrutiny over their huge capital spending plans.
META Retail View
On Stocktwits, retail sentiment remained “bullish” from the previous day, and Huang’s comments were selected for discussion among traders.
“Jensen Huang was asked who in the world is using AI better than anyone else. His answer wasn’t OpenAI. It wasn’t Google. It wasn’t even Nvidia itself. Here’s what he said on CNBC: ‘No one is using AI better than Meta.'”
META evaluation, recent catalysts
According to data from Koyfin, 57 of the 64 analysts covering META currently rate the stock as a “buy” or better, while the remaining seven rate it as a “hold.” Their average price target is $826.75, implying 38% upside from the stock’s closing price.
In terms of 12-month forward price-to-earnings ratio (P/E), Meta Platforms’ stock is trading at 18.3x, making it the cheapest stock in the Magnificent Seven group on that basis.
The stock’s Relative Strength Index (RSI) is 41.61, indicating relatively calm momentum. RSI values above 70 are generally considered overbought, while values below 30 suggest oversold conditions. Levels around 50 usually indicate neutral momentum.
On May 20, the social media giant laid off about 8,000 people, or 10% of its workforce, and moved an equal number of employees in-house. Last week, Meta announced subscription offerings for its flagship apps Instagram, Facebook, and WhatsApp, and outlined initial plans to open up its cloud computing infrastructure to outside companies.
