Can Meta Help Apple Intelligence? Meta Stock Gains After Report

Meta platforms

Meta platforms





IBD stock analysis

  • Stock below 514.01 buy point
  • The META took a high on Friday, an early buy point

Collaborative assessment

Industry group ranking

Method of emergence

Cup with handle

* Not real-time data. All data shown was taken on 06/24/2024 at 11:31AM EDT.

Meta platforms (Meta) is the IBD stock for Monday. Shares of Meta rose toward a possible buy point following a report that it is in talks to offer its AI models. Apple (APL)


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The Wall Street Journal It announced the discussions early Sunday, citing unnamed sources. While the deal isn’t finalized, Apple will be able to integrate Meta’s AI models into its recently announced Apple Intelligence products, according to the report. Apple plans to integrate many AI-powered features into its iPhone and other products using its own algorithms and through partnerships. The partnership is the first with ChatGPT parent company OpenAI, as the companies announced earlier this month.

In the stock market today, Meta shares rose more than 1% to 502.46 in morning trade. According to MarketSurge charts, the stock is nearing a handle buy point with the 514.01 cup.

Apple’s AI projects

A Wall Street Journal report noted that the deal with Meta will help Apple offer users a wider range of AI options. But it will also help raise the profile of Meta’s AI efforts. CEO Mark Zuckerberg announced Meta’s latest AI model, the Llama 3, in April. He has promised to build “world-leading AI”.

But investors dinged Meta stock following its first-quarter report in April, in part on concerns about how much the company’s AI push will cost.

The talks are significant, especially since Apple and Meta are known to be major competitors in the virtual-reality headset market. In addition, a change in Apple’s iPhone privacy policies greatly impacted Meta’s ability to sell targeted ads on Facebook and Instagram in 2022.

Zuckerberg is taking an open-source approach to AI, which includes giving away its products for free. The company recently integrated its chatbot into Facebook and Instagram. The Journal report noted that it was unclear how much of a financial windfall a partnership with Apple would provide.

Apple is also said to be in talks with Google’s parent company letters (Google) to use its models. Also, the Wall Street Journal reported on Sunday that Apple is in talks with AI startups Anthropic and Perplexity.

Meta Stock: Q1 Letdown

According to MarketSurge, the meta stock formed a handle pattern with a cup last week, with a decline of approximately 2%.

Meta shares have gained nearly 40% to start 2024, helped by strong fourth-quarter earnings and plans for its first dividend. But shares fell 10.5% following Meta’s first-quarter earnings report. Investors were shocked when Meta provided lower-than-expected second-quarter revenue guidance, while also detailing plans to increase capital spending.

But Meta still has the support of many Wall Street analysts. Analysts at Bernstein acknowledged in a recent client note that Meta stock has a bearish case as revenue growth slows against strong comparisons from a year ago. There are still reasons for optimism.

“A strong digital ad market with new ad products such as click-to-message and Advantage+ generative AI ad creative adoption could combine to offset expected tougher comps in the second half of 2024,” Bernstein analyst Mark Shmulik wrote. “Importantly, we believe that a combination of strong macro-tailwinds and company-specific initiatives will allow Meta to pull to control the pattern of revenue growth this year.”

The next test for Meta will come with its second-quarter report, which will be released in late July. According to FactSet, analysts expect Meta’s earnings per share to rise 57% to $4.69 in the June quarter. Sales rose 19% to $38.2 billion.

Meta Stock: Near Buy Zone

Shares briefly pushed above Friday’s high of 503.54 on Monday, providing a possible early entry.

The IBD Stock Checkout The tool shows a best-possible 99 out of 93 relative strength ratings for meta stocks. This means it has outperformed most of the market over the past 12 months.

Meta Stock has the best-possible IBD Composite Rating of 99, according to IBD StockCheck. Meta stocks are currently leading all other stocks based on the score, key performance metrics and technical strength.

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