Should users consider purchasing Meta Platforms' stocks at the present moment?
### Meta's AI-driven Advertising Strategy and Llama Progress
Meta Platforms, the parent company behind social networks like Facebook, Instagram, and WhatsApp, is making significant strides in its AI-driven advertising strategy and large language model (LLM) technology.
#### AI-driven Advertising Strategy
Meta's latest developments in AI-driven advertising are marked by the introduction of the GEM (Generative Ads Recommendation) model and the Incremental Attribution feature. The GEM model, trained on Meta's largest GPU cluster, has boosted ad conversions by 5% in Reels, while the Incremental Attribution feature showed a 46% average lift in incremental conversions during testing. These advancements underscore AI's impact on ad effectiveness and advertiser return on investment (ROI).
Meta aims to have AI generate ads end-to-end by 2026, automating tasks such as copywriting, creative generation, targeted media placement, budget allocation, and personalization for audience segments. The company is moving from AI as an optimization tool (e.g., Advantage+ suite currently tweaking headlines and creatives) towards an AI-first campaign engine that can produce and manage ads with minimal human input.
Transparency and control have also been enhanced with the introduction of the "Creative breakdown" feature in Ads Manager. This provides advertisers with granular insights into how AI-generated images and Flexible formats impact campaign performance, addressing demands for transparency in AI-driven optimization.
To support these AI initiatives, Meta has raised its 2025 capital expenditure forecast to $64–72 billion.
#### Llama Large Language Model (LLM) Progress
Meta's flagship LLM, Llama, has reached version 4, which includes the smaller "Scout" and larger "Maverick" models. Meta positions Llama 4 as competitive with Google's and OpenAI's LLMs. However, there has been some criticism about Meta's tactics to rank highly on benchmarks and restrictions in their open-source licensing for large companies.
Meta focuses on developing powerful, open-weight LLMs as a core pillar of its AI strategy, aiming to integrate these models deeply into products beyond advertising, including hardware.
#### Summary
Meta's latest developments indicate a strong push towards making AI the backbone of its advertising ecosystem and advancing its foundational LLM technology. Adapting early to Meta's AI tools and building AI literacy will be crucial for marketers and advertisers to thrive in this evolving landscape.
According to Wall Street's consensus estimate, Meta's annual EPS could grow to $28.48 in 2026. Considering the company's momentum in the AI space, there is a realistic chance Meta stock could climb by 42.6% over the next 18 months. Meta's stock is currently trading at a price-to-earnings (P/E) ratio of 26.6, making it the second-cheapest stock in the "Magnificent Seven." The Meta AI virtual assistant, powered by Llama, is accessible through Facebook, Instagram, WhatsApp, Threads, and Messenger. Meta is allocating up to $72 billion toward capital expenditures (capex) in 2022 for AI-related projects.
If Meta's stock performance aligns with these projections, it could be a buy due to its attractive valuation and strong revenue and earnings growth.
- As Meta invests heavily in its AI-driven advertising strategy and large language model (LLM) technology, the company is positioning itself to foster a more efficient and effective advertising ecosystem, with AI potentially generating ads end-to-end by 2026.
- In the realm of finance, Meta has announced an increase in its 2025 capital expenditure forecast to $64–72 billion, a move justified by the company's ambitious AI initiatives.
- The development of Llama 4, Meta's flagship LLM, is not only advancing the company's AI strategy but also expanding its potential applications across various products and hardware, demonstrating the intersection of finance, technology, and artificial intelligence.
