We recently published a list of 10 AI Stocks Making Waves on Wall Street. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other AI stocks making waves on Wall Street.
The moment of reckoning has arrived: China’s artificial intelligence industry has almost caught up with the US. Moreover, it is more open and efficient too. This is unlike the US’s strategy towards the nascent technology, which it wants to keep largely within its borders. To recap President Donald Trump’s first week in office, it is safe to say that the message towards the community has been simple: Build, build, and build.
When he came to office, Trump immediately rescinded Biden’s sweeping executive order on AI. While AI with fewer guardrails may be terrifying for some, it may be a possible way to expand into new territories and win the race toward AI. In light of this, Trump has recently signed an executive order related to AI to “make America the world capital in artificial intelligence”.
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The President has also announced a joint venture led by SoftBank Group Corp., OpenAI, and Oracle Corp. The “Stargate initiative” will fund billions of dollars worth of AI infrastructure. On the eve of taking office, President Trump said that he would allow “people with a lot of money” to invest in so-called “AI plants” that power data centers for artificial intelligence.
Trump’s actions signal the direction AI policy is going to take under his reign, particularly when it comes to competing with China. Meanwhile, both China and the US are doing everything in their power to win the AI race. Back in September, OpenAI released the world’s first reasoning model, o1, which used a “chain of thought” to answer difficult questions. Other companies soon followed suit. Google developed its own reasoning model called “Gemini Flash Thinking” in December and a few days later, o3 was born.
Keeping a close tab on these developments, China has recently made a mark of its own, igniting panic in Silicon Valley along the way. An AI lab, known as DeepSeek, unveiled a free, open-source large-language model in late December. According to the lab, it took only two months and less than $6 million to build the model, using reduced-capability chips from Nvidia called H800s.
Third-party benchmark tests have revealed how DeepSeek’s model outperformed Meta’s Llama 3.1, OpenAI’s GPT-4o, and Anthropic’s Claude Sonnet 3.5 in accuracy ranging from complex problem-solving to math and coding. If this wasn’t enough, DeepSeek, last Monday, released r1, a reasoning model that has outperformed OpenAI’s latest o1 in several of these third-party tests.
“To see the DeepSeek new model, it’s super impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient. We should take the developments out of China very, very seriously”.
-Microsoft CEO Satya Nadella
DeepSeek’s r1 is particularly remarkable considering it also had to navigate the strict semiconductor restrictions that the U.S. government has imposed on China. These restrictions had cut the country off from access to the most powerful chips, like Nvidia’s H100s. The development also implies how the AI lab either found a way around the rules or, the controls were simply not as effective as anticipated. Does this mean that Trump’s stance toward fewer guardrails is the way to go? We are yet to find out.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Photo by Timothy Hales Bennett on Unsplash
Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Investors: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company. On Friday, January 24, Meta CEO Mark Zuckerberg announced that the company plans to invest an estimated $60 billion to $65 billion in capital expenditures in 2025 to continue building its AI infrastructure. According to Zuckerberg, the company is building a large data center that “would cover a significant part of Manhattan” to power its AI offerings. It plans to bring on around 1 gigawatt in compute and conclude the year with more than 1.3 million graphics processing units. According to Zuckerberg, 2025 is going to be a “defining year for AI”. Adding to these thoughts, he said that Meta AI digital assistant is set to become the “leading assistant serving more than 1 billion people.” The company is also building an AI engineer that will contribute “increasing amounts of code to our R&D efforts,” he added.
“This is a massive effort, and over the coming years it will drive our core products and business, unlock historic innovation, and extend American technology leadership”.
-Zuckerberg wrote in a post on Facebook.
Overall, META ranks 1st on our list of AI stocks making waves on Wall Street. While we acknowledge the potential of META as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.