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META Shares Rise 47% YTD: Can AI Focus Further Drive the Stock?
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Meta Platforms’ (META - Free Report) shares have gained 47.3% year to date (YTD), outperforming the Zacks Internet - Software industry’s growth of 15.3% and the broader Zacks Computer & Technology sector’s return of 21%.
META’s share price has risen due to its strategy of leveraging AI through its platforms, including Facebook, Instagram, WhatsApp and Messenger. These services currently reach 3.2 billion people daily.
The social media giant has been taking a number of initiatives aimed at driving user base. A rich creator base has been a key catalyst for Meta Platforms. The company recently launched a Creator Lab in India (one of its biggest markets in terms of user base). Creator Lab is an educational resource designed by creators for creators.
META is expanding Threads web features, including insights, multiple drafts and scheduling functions. These features will help creators easily plan content and connect with new and existing user bases.
AI initiatives are gaining traction. META has expanded access to Meta AI, which is now available in seven new languages and 22 new countries.
META to Focus on Geothermal Energy for AI Data Centers
AI data centers consume a lot of power. According to estimates from NVIDIA (NVDA - Free Report) , hyper scalers, including META, Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) and Google, plan to spend $1 trillion on data center upgrades related to AI. Hence, power consumption is expected to increase exponentially.
Meta Platforms’ AI initiatives require huge data-center-related spending. META currently expects a capital expenditure of $37-$40 billion for 2024, and is on track to spend more on developing its advanced models and largest AI services in the world.
META is now focusing on expanding its use of geothermal energy as part of its commitment to using clean energy for work.
In partnership with Sage Geosystems, Meta Platforms recently announced plans to boost geothermal power production in the United States. This collaboration aims to develop a geothermal system to provide emission-free power for data centers and help control rising electricity demand. The first phase is expected to come online by 2027, generating 150 megawatts.
This agreement marks the first use of next-generation geothermal power in the United States, highlighting the potential of geothermal energy as a viable renewable resource across the country. As part of the deal, Sage Geosystems will supply carbon-free power to Meta Platforms’ data centers using its patented Geopressured Geothermal System (GGS). Currently, geothermal energy is mainly used in Nevada, Utah and California.
The GGS technology is preferred because it uses hot dry rock, which is much more abundant than the resources used in traditional hydrothermal formations. This abundance makes the GGS technology easy to scale and rapidly deploy in the United States and globally.
As one of the biggest corporate purchasers of renewable energy worldwide, Meta Platforms has contracted more than 12,000 MW in renewable energy projects. This increases the effort to move toward a carbon-free economy by offering solutions that improve the environment.
META Stock’s Prospects Rides on AI Usage
Meta Platforms reported a 22% year-over-year increase in revenues to $39.1 billion due to increased user interaction on its platforms, driven by AI-recommended content.
Instagram has become a significant revenue generator for Meta Platforms, driven by AI. Meta AI is used to recommend about 40% of the content that users see on Instagram. According to META, users have spent 24% more time on Instagram since the inception of Reels. AI is significantly enhancing Instagram's monetization efforts.
Messenger and WhatsApp are the most valued drivers for Meta Platforms. It is impressive how quickly small and medium-sized enterprises are utilizing WhatsApp Business. The growing use of these platforms for communication increases Meta Platforms’ potential to enter and capitalize on the lucrative payments market.
META's long-term success depends on executing progressive plans, including metaverse, AI integration and revenue diversification. This Zacks Rank #3 (Hold) company’s long-term prospect depends on its ability to navigate regulatory challenges, economic uncertainty and intense competition while seizing emerging digital and virtual opportunities.
Image: Bigstock
META Shares Rise 47% YTD: Can AI Focus Further Drive the Stock?
Meta Platforms’ (META - Free Report) shares have gained 47.3% year to date (YTD), outperforming the Zacks Internet - Software industry’s growth of 15.3% and the broader Zacks Computer & Technology sector’s return of 21%.
META’s share price has risen due to its strategy of leveraging AI through its platforms, including Facebook, Instagram, WhatsApp and Messenger. These services currently reach 3.2 billion people daily.
The social media giant has been taking a number of initiatives aimed at driving user base. A rich creator base has been a key catalyst for Meta Platforms. The company recently launched a Creator Lab in India (one of its biggest markets in terms of user base). Creator Lab is an educational resource designed by creators for creators.
META is expanding Threads web features, including insights, multiple drafts and scheduling functions. These features will help creators easily plan content and connect with new and existing user bases.
AI initiatives are gaining traction. META has expanded access to Meta AI, which is now available in seven new languages and 22 new countries.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
META to Focus on Geothermal Energy for AI Data Centers
AI data centers consume a lot of power. According to estimates from NVIDIA (NVDA - Free Report) , hyper scalers, including META, Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) and Google, plan to spend $1 trillion on data center upgrades related to AI. Hence, power consumption is expected to increase exponentially.
Meta Platforms’ AI initiatives require huge data-center-related spending. META currently expects a capital expenditure of $37-$40 billion for 2024, and is on track to spend more on developing its advanced models and largest AI services in the world.
META is now focusing on expanding its use of geothermal energy as part of its commitment to using clean energy for work.
In partnership with Sage Geosystems, Meta Platforms recently announced plans to boost geothermal power production in the United States. This collaboration aims to develop a geothermal system to provide emission-free power for data centers and help control rising electricity demand. The first phase is expected to come online by 2027, generating 150 megawatts.
This agreement marks the first use of next-generation geothermal power in the United States, highlighting the potential of geothermal energy as a viable renewable resource across the country. As part of the deal, Sage Geosystems will supply carbon-free power to Meta Platforms’ data centers using its patented Geopressured Geothermal System (GGS). Currently, geothermal energy is mainly used in Nevada, Utah and California.
The GGS technology is preferred because it uses hot dry rock, which is much more abundant than the resources used in traditional hydrothermal formations. This abundance makes the GGS technology easy to scale and rapidly deploy in the United States and globally.
As one of the biggest corporate purchasers of renewable energy worldwide, Meta Platforms has contracted more than 12,000 MW in renewable energy projects. This increases the effort to move toward a carbon-free economy by offering solutions that improve the environment.
META Stock’s Prospects Rides on AI Usage
Meta Platforms reported a 22% year-over-year increase in revenues to $39.1 billion due to increased user interaction on its platforms, driven by AI-recommended content.
Instagram has become a significant revenue generator for Meta Platforms, driven by AI. Meta AI is used to recommend about 40% of the content that users see on Instagram. According to META, users have spent 24% more time on Instagram since the inception of Reels. AI is significantly enhancing Instagram's monetization efforts.
Messenger and WhatsApp are the most valued drivers for Meta Platforms. It is impressive how quickly small and medium-sized enterprises are utilizing WhatsApp Business. The growing use of these platforms for communication increases Meta Platforms’ potential to enter and capitalize on the lucrative payments market.
META's long-term success depends on executing progressive plans, including metaverse, AI integration and revenue diversification. This Zacks Rank #3 (Hold) company’s long-term prospect depends on its ability to navigate regulatory challenges, economic uncertainty and intense competition while seizing emerging digital and virtual opportunities.
You can see the complete list of today’s Zacks #1 Rank stocks here.