Meta Platforms (META) reached a new all-time intraday high on Thursday, buoyed by strong investor interest following its recent developer event that showcased the company’s ambitious plans in artificial intelligence. Shares climbed to $577 shortly after the market opened, before settling down 0.7% to around $564 mid-morning.
During the Meta Connect 2024 event, CEO Mark Zuckerberg introduced the latest AI model, Llama 3.2, alongside new products including the “Orion” augmented reality glasses, updated Ray-Ban smart glasses, and a new mixed-reality Quest headset. As Meta strives to keep pace with rivals like Microsoft and Google, it has reported that its AI now has an impressive 185 million weekly active users, closing in on ChatGPT’s 200 million.
The newly released Llama 3.2 builds on its predecessor, Llama 3.1, which was launched earlier this summer. Meta asserts that Llama 3.2 not only matches OpenAI’s GPT-4o-mini but also outperforms Google’s AI model, Gemma, in several areas. This open-source model can process images, charts, graphs, and text, enabling developers to create more sophisticated applications. The AI assistant integrated into Meta’s platforms, including Instagram and Messenger, can now even mimic the voices of celebrities like Awkwafina and John Cena.
Zuckerberg remarked that Meta has reached a pivotal moment in the AI industry, positioning Llama as a potential industry standard. Analysts are optimistic about Meta’s trajectory, with JPMorgan noting that the event underscored the company’s ambition to be a leader in AI technology. Jefferies analysts added that Llama’s new multimodal capabilities signal a growing momentum in both consumer and enterprise markets.
Following the event, Bank of America raised its price target for Meta to $630, while JPMorgan forecasted a target of $640, and Jefferies reiterated a target of $600. Bloomberg’s consensus estimate for the stock over the next year stands at $583, with 88% of Wall Street analysts recommending a buy.
However, analysts caution that it may take time for Meta to fully capitalize on its AI investments. Jefferies highlighted the potential for a multi-year gap between investment and revenue generation, although they remain confident in Meta’s ability to scale and monetize new offerings effectively.
Amid these advancements, Meta’s Reality Labs division, focused on metaverse products, continues to incur substantial losses, with costs totaling $50 billion to date. JPMorgan estimates that Reality Labs could lead to another $23 billion in losses by 2025.
Despite the challenges, Meta’s foray into AI has clearly impacted its stock performance, contributing to its status as part of the “Magnificent Seven” Big Tech stocks that have reached historic highs. Meta’s stock has surged nearly 91% over the past year, with over 60% of that increase occurring in 2024.
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