Meta Inc. (META) shares hit an all-time high Thursday after a developer event that showcased its ambitions in artificial intelligence. Shares rose to $577 after the market opened before falling 0.7%, or about $564, by mid-morning.
At its Meta Connect 2024 conference on Wednesday, Meta CEO Mark Zuckerberg unveiled its latest AI model, Llama 3.2. The tech giant also unveiled new augmented reality glasses, the Orion, as well as the latest Ray Ban smart glasses and Quest mixed reality headset.
Meta has been racing to catch up with competitors in the AI space — big tech companies like Microsoft (MSFT) and Google (GOOG, GOOGL) as well as AI startup OpenAI. While not as popular as ChatGPT, Meta claimed in April that its AI 185 million weekly active usersclose to ChatGPT, which has 200 million users.
Meta released its AI model, Llama 3.1, this summer, which it claimed could outperform OpenAI’s models in a number of areas. Llama 3.2 is another step forward for Meta as it looks to take on OpenAI and other AI companies. It’s Meta’s AI model. The first open source model that can process images, charts, graphs and text.This will allow developers using Llama 3.2 to create more complex applications.
The company said Llama 3.2 is competitive with OpenAI’s GPT4o-mini and outperforms Google’s Gemma AI model by some metrics. The AI assistant, available on Instagram, Messenger, WhatsApp and Facebook, can now speak in the voices of celebrities including Awkwafina, Dame Judi Dench, John Cena, Keegan-Michael Key and Kristen Bell.
Meta has “reached an industry inflection point,” Zuckerberg said, as its AI model, Llama, “becomes an industry standard.”
Analysts say Meta is well positioned among its competitors. “We believe Meta Connect reflects Meta’s ambitions to become one of the leading, industry-shaping AI companies,” JPMorgan analyst Doug Anmuth wrote in a note to investors Thursday morning.
“Mark Zuckerberg’s presentation of Meta’s AI future at Meta Connect made us more optimistic about Meta’s AI opportunities for consumers and businesses,” Jefferies analysts wrote. “At the enterprise level, Llama has become a serious competitor and we see increasing momentum with its new multimedia capabilities.”
Bank of America analysts on Thursday raised their price target on the stock to $630. JPMorgan expects Meta shares to rise to $640, while Jefferies reiterated its price target of $600. Wall Street’s average 12-month price forecast for Meta’s stock is slightly lower at $583, according to Bloomberg estimates. About 88% of Wall Street analysts covering the stock recommend buying it.
But it may be some time before Meta reaps the full benefits of its AI innovations. Jefferies analysts noted “a potential multi-year gap between investments and revenues,” but said they were “confident in Meta’s proven ability to successfully scale and monetize new products.”
Meanwhile, Meta’s Reality Labs division, which is working on metaverse products, continues to lose billions of dollars for the company. The team’s massive spending has cost the company $50 billion so far, and JPMorgan analysts expect Reality Labs to lose another $23 billion by 2025.
Meta may not have fully profited from its AI advances yet, but its AI moves have certainly boosted its stock value. Meta is part of the “Big Seven” tech stocks that have soared to unprecedented highs over the past year. Meta’s stock is up about 91% over the past year, including more than 60% in 2024.
Laura Bratton is a reporter at Yahoo Finance.
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