Every Meta Platforms Stock Investor Should Watch This Key Number on Oct. 30

From Nasdaq: 2024-10-19 05:59:00

Last week, America’s biggest banks started earnings season, but Wall Street awaits results from leading trillion-dollar tech giants in artificial intelligence (AI). Meta Platforms (NASDAQ: META) will report Q3 results on Oct. 30. Investors focus on AI strategy, including the impact of integrating AI across platforms like Facebook and Instagram. Meta also launched a virtual assistant called Meta AI, powered by its large language model (LLM) called Llama.

Meta is investing heavily in AI infrastructure, including data centers and GPUs from Nvidia, to develop new LLM models like Llama 4. This new model requires 160,000 GPUs, with CEO Mark Zuckerberg aiming to deploy 600,000 GPUs by 2024. Meta’s capex forecast has increased several times, reaching $37 billion to $40 billion for 2024. However, monetization of AI through features like Business AI on Facebook and Instagram may be necessary for real returns.

Despite strong profits driving Meta’s stock surge, excessive spending on VR and the metaverse previously dented its stocks. The company has faced pressure to justify spending without immediate revenue streams from open-source LLMs like Llama. Earnings could be impacted by high capex in AI infrastructure, potentially causing turbulence if earnings stagnate or decline. However, Meta stock currently trades at a discount with a P/E ratio of 29.4, offering potential for growth.

Investors should carefully consider Meta Platforms before investing, as the company’s heavy investment in AI infrastructure may require time to generate substantial returns. The company’s reliance on building LLMs like Llama may delay monetization, affecting earnings and stock performance. While Meta stock trades at a discount compared to the Nasdaq-100, potential turbulence could arise if earnings growth stalls in the future.



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