Meta Platforms, Inc. Faces Setback in AI Initiative Following Rejection of $800 Million Proposal—What’s Coming Next?
Overview of AI Stocks Influencing Wall Street
Recent Spotlight on AI Stocks
In the fast-evolving tech landscape, AI stocks have gained considerable attention, notably with the recent release of a new large language model by the startup DeepSeek. The unveiling of the DeepSeek-V3-0324 model on the AI platform Hugging Face is seen as a strategic move to enhance competition, particularly with Western AI companies.
Key Features of DeepSeek-V3-0324
DeepSeek’s latest model offers several improvements, which include:
- Enhanced Reasoning Abilities: The model’s capability to solve complex problems has been significantly boosted.
- Improved Web Development: The front-end development skills have been optimized for better performance.
- Upgraded Language Proficiency: Notably, there are enhancements in Chinese writing and coding.
Reportedly, the model has shown substantial advancements in benchmark tests. According to data, the new version achieved a score of 59.4 on the American Invitational Mathematics Examination (AIME), an impressive jump from its predecessor’s score of 39.6. On LiveCodeBench, it improved by 10 points, attaining a score of 49.2.
Expert Evaluations
Feedback from professionals regarding DeepSeek-V3-0324 has been overwhelmingly positive. Kuittinen Petri, a lecturer at Häme University of Applied Sciences, tested the new model and quoted that it could generate an entire mobile-friendly website with 958 lines of code. He pointed out that DeepSeek is achieving such results with only 2% of the resources used by larger companies like OpenAI.
Jasper Zhang, a Math Olympiad gold medalist, also affirmed the model’s efficiency when it smoothly solved an AIME problem, stating that more confident open-source models would ultimately prevail in the tech arena.
The Role of Meta Platforms, Inc.
Meta Platforms, Inc. (NASDAQ: META) is another significant player in the AI sector, currently ranking third on a list of AI stocks making headlines. The company’s focus on artificial intelligence has intensified, with CEO Mark Zuckerberg expressing that 2025 would be pivotal for AI development.
Despite this ambition, Meta faced setbacks, such as a failed negotiation with Korean chip startup FuriosaAI, which declined an $800 million offer from Meta over disagreements on future strategy.
Analyst Insights on Meta
As of March 25, 2024, Justin Post from Bank of America Securities maintained a "Buy" rating for Meta’s stock, supported by a consensus rating from Wall Street analysts. The average price expectation for META stands at $775, reflecting a 24% upside, while a peak estimate of $900 suggests potential growth of 44%.
Investment Considerations in AI Stocks
Choosing the right AI stocks for investment requires careful consideration. Analysts emphasize the importance of identifying stocks that hedge funds favor, as research indicates that mimicking top hedge fund choices can yield positive returns. Historical data shows that a selection strategy of both small-cap and large-cap stocks has resulted in a considerable overall gain since May 2014.
For investors looking at promising alternatives to Meta, it’s suggested to explore AI stocks with more attractive valuations, specifically those trading below five times their earnings potential.
Reading Recommendations
For further insights, you may want to explore additional content:
These resources can provide a broader understanding of the current landscape of AI investments and help guide decision-making for prospective stock purchases.
