3. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Holders: 246
Meta Platforms Inc’s (NASDAQ:META) moves in AI contribute to its ranking as the third biggest AI story on our list. Meta AI, built on Llama 3, is one of the most advanced AI models developed by the company. Meta AI is capable of complex reasoning, problem-solving, and understanding instructions. Like Microsoft, Meta Platforms Inc (NASDAQ:META) is also advancing its AI infrastructure capabilities. In April, the company introduced its next generation of custom chips to manage its AI workloads. The new chips will significantly enhance the company’s recommendation ads model on Facebook and Instagram. 30% of posts on Facebook and 50% of content on Instagram are delivered by the company’s AI recommendation system. The Meta Training and Inference Accelerator (MTIA) v1 is the company’s first inference accelerator designed in-house, capable of handling high-complexity and low-complexity ranking and recommendation models. The company expects expenditure on AI to expand. As per a recent update, the company looks forward to increasing its capital expenditure from $35 billion to $40 billion, driven by large investments in AI, in 2024.
Meta’s growth in producing responsible AI models can be attributed to its strong research capabilities. On June 18, Meta Platforms Inc (NASDAQ:META) launched new AI research models to boost innovation at a much larger scale than before. The company released five new models including image-to-text and text-to-music generation models, a prediction model, and a model that detects AI-generated speech. Meta Chameleon is a family of mixed-modal models capable of understanding, processing, and delivering both text and words at the same time. The AI can take any input of text and words to output any combination of text and words required. To replace standard text and idea generation, the company proposed a multi-token prediction approach that would make large language models significantly more efficient. This approach trains models to predict a variety of future words instantly, replacing the common one-at-a-time approach.
Justin Patterson, Keybanc’s managing director, recently talked about Meta’s position in the market in an interview on Yahoo Finance. He raised his price target from $475 to $540 amid Meta’s strong advertising growth. Patterson pointed out that Meta’s ad revenue is increasing every quarter which is a reflection of strong demand and he is optimistic about returns from the AI advertising cycle. Overall, Patterson has noticed stronger engagement across all of Meta’s platforms due to AI investments and improvements in its ad models.
META was held by 246 hedge funds at the close of Q1 2024, with total stakes amounting to $46.92 billion. Of those, Ken Griffin’s Citadel Investment Group was the highest stakeholder with a position of $7.07 billion.
On July 3, Loop Capital reiterated a buy rating on the stock and maintained its price target of $550. Based on price targets from 67 analysts, META’s median price forecast of $530 represents an upside of almost 4% from its current price of $509.65.
