Meta Platforms (META) is experiencing a remarkable surge in its stock value, achieving gains for 19 consecutive trading days. This impressive streak marks the longest winning period for any company currently listed on the Nasdaq 100 (^NDX) since 1990. Mandeep Singh, an analyst at Bloomberg Intelligence, discussed this phenomenon on Catalysts with Madison Mills, highlighting the critical role of Artificial Intelligence (AI) in Meta’s success.
Singh pointed out Meta’s dominant position in internet usage, stating, “When you look at the time spent on the internet, Meta owns a good chunk of it.” He emphasized the vast user base across Meta’s platforms, including Facebook, Instagram, and WhatsApp, each boasting “north of 1 billion daily active users.” The analyst underscored the successful integration of AI across Meta’s applications as a primary driver for this growth. “What they have done very successfully in the case of Meta is apply AI across their apps… Meta is one of the prime examples of how effectively they have added new tools to create ads using generative AI to target ads using AI.”
This strategic implementation of AI has demonstrably improved Meta’s financial performance. Singh explained, “That’s why all the infrastructure that they have invested in the CapEx raise is really translating into higher ad pricing and better engagement on their platform.” The investment in AI infrastructure is yielding returns through increased advertising revenue and enhanced user engagement, directly contributing to the stock’s upward trajectory.
Furthermore, recent reports indicate Meta’s proactive approach to hardware innovation. Arm Holdings (ARM) is reportedly developing custom semiconductor chips, with Meta identified as their first major client. This move aligns with a broader trend among hyperscale companies like Alphabet (GOOG, GOOGL), Amazon (AMZN), and Microsoft (MSFT) to develop proprietary chips. Singh commented on Meta’s chip development initiative, stating he’s “not surprised [Meta] are taking steps to develop their own chip,” especially considering the current complexities in the semiconductor industry, including trade restrictions and reliance on companies like Nvidia (NVDA). Developing in-house chip capabilities could provide Meta with greater control, efficiency, and potentially a competitive edge in the long run.
In conclusion, Meta’s record-breaking stock run on the Nasdaq is significantly driven by its successful AI implementation across its platforms. This strategic focus on AI has boosted ad revenue and user engagement. Looking ahead, Meta’s move into custom chip development signals a continued commitment to innovation and long-term growth within the competitive tech landscape.
