Meta may be a better AI stock to buy than Nvidia after DeepSeek's R1 debut

From Nasdaq: 2025-01-30 04:50:00

DeepSeek’s new R1 large language model is a game-changer in the AI world, challenging OpenAI’s o1 model. Nvidia’s stock took a hit, but Meta Platforms saw a slight increase. Meta’s open-source model, Llama, could benefit from DeepSeek’s innovations, making it a potential better buy than Nvidia post-R1 launch.

Meta’s CEO Mark Zuckerberg is optimistic about Meta AI’s future, predicting Llama 4 as a leading model. Meta’s stock is cheaper than Nvidia’s, with a lower forward P/E ratio. Advancements in AI training and lower deployment costs could give Meta an edge.

Nvidia investors may have overreacted to DeepSeek’s news. Reports about DeepSeek’s R1 model may be misleading, and Nvidia is likely to bounce back. The demand for Nvidia’s GPUs could increase due to DeepSeek’s innovations, leading to strong quarterly results.

Investors may consider Meta as the better AI stock post-DeepSeek’s R1 launch, but Nvidia remains a strong long-term pick. Nvidia’s Blackwell chips are unlikely to be canceled, and the company is expected to rebound after the initial shock. Both companies could benefit from lower inferencing costs.

The Motley Fool’s Stock Advisor team did not include Meta Platforms in their top 10 stocks to buy now. Nvidia’s past performance on the list shows potential for substantial returns. Stock Advisor provides guidance for investors looking to build a successful portfolio with regular updates and new stock picks.

Randi Zuckerberg, former Facebook director and sister to Meta CEO Mark Zuckerberg, is on The Motley Fool’s board. The Motley Fool holds positions in Meta Platforms and Nvidia. The author’s views do not necessarily reflect those of Nasdaq, Inc.



Read more at Nasdaq: Is Meta a Better Artificial Intelligence (AI) Stock to Buy Than Nvidia After DeepSeek’s Stunning R1 Debut?