Tue, October 15, 2024

Meta’s Earnings: AI Initiatives Shine

Meta Faced With An Antitrust Fight Over An Acquisition

Meta Platforms Put AI at the Forefront

Meta Platforms, previously known as Facebook, is poised to release its fourth-quarter earnings report after today’s market close. Wall Street analysts predict the company will report revenue of $39.1 billion and adjusted earnings of $4.82 per share for the December quarter. A significant focus is on Meta’s strong commitment to artificial intelligence (AI).

Wall Street Anticipates Strong Q4 Earnings

CEO Mark Zuckerberg has emphatically stated that AI investment will form the cornerstone of the company’s efforts, encompassing both engineering and infrastructure development in the coming year. Meta has ambitious plans to deploy 350,000 Nvidia H100 graphics processing units and nearly 600,000 H100 equivalent GPUs, signifying a relentless pursuit of a vast computing infrastructure to support its AI initiatives.

BofA Global Research analyst Justin Post has maintained a favourable Buy rating for Meta’s stock, with a price target of $425. The post highlights various factors that could boost the stock, including developing monetization opportunities in Reels and messaging. Moreover, Meta’s strategic emphasis on AI technology will enhance user engagement and stimulate advertising expenditure.

The AI Bubble and Market Valuations

Meta’s stock performance over the past year has been extraordinary, with an impressive surge of 155%, markedly outperforming the Nasdaq Composite, which itself saw a 28% increase during the same period.

However, as Meta and other tech giants like Apple and Amazon continue to impress with their financial achievements, experts are growing increasingly concerned about the burgeoning bubble surrounding artificial intelligence. While AI has driven the soaring valuations of many tech stocks, it also poses risks that have not been fully assessed.

Complexities and Concerns Surrounding Interoperability

Meta’s unwavering commitment to AI research underscores its progress toward greater interoperability across social networks. Threads, Meta’s social media platform, aims to allow users to follow accounts from other social networks and publish posts beyond the confines of Threads, reaching a broader audience across the social web.

Central to this interoperability effort is ActivityPub, a software protocol introduced in 2018. ActivityPub enables cross-compatibility among diverse segments of the social internet within the Federated network of open networks known as the Fediverse. Decentralized social networks have been around for some time but have primarily attracted dedicated enthusiasts—until Twitter’s dramatic transformation following Elon Musk’s acquisition, which led to a migration of disenchanted users to newer, more welcoming areas of the Fediverse.

Navigating the Uncharted Waters of the New Era of Social Media

A key question emerges: why does Meta seek to establish interoperability in the first place? Lambert suggests that Meta aims to give users greater control over their content and interactions, facilitating easier engagement across multiple platforms. In response to past antitrust allegations from the US Federal Trade Commission, Meta may also be attempting to project a more open and competitive stance, aiming to placate regulators and promote healthy competition.

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