"Meta Platforms is one of the biggest spenders on artificial intelligence in the world. Management expects to spend roughly $67 billion on capital expenditures this year, most of that going toward building and outfitting AI data centers. While other hyperscalers are spending even more, Meta doesn't rent out any of its compute like the three big cloud computing giants. All that spend goes toward training and running its own AI."
"There's good reason for Meta to spend so much on AI: It could be one of the biggest beneficiaries of advances in generative AI in both the near and long term. In the near term, Meta's machine learning algorithms are essential for optimizing content feeds in its social media apps. The algorithms are responsible for both what content users see, what ads they see, and when they see it."
Meta Platforms has a median price target of $880 per share, implying roughly 22% upside from current share levels and the highest upside among $1 trillion-plus companies. Management plans about $67 billion in capital expenditures this year, primarily for building and outfitting AI data centers and for training and running proprietary AI rather than renting compute to others. Advances in generative AI could further enhance ad targeting and campaign management. Meta's machine learning algorithms currently optimize content feeds and ad delivery to maximize user time and ad revenue per minute, positioning the company to capture both near-term and long-term AI-driven gains.
Read at The Motley Fool
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