meta, microsoft and amazon Updates

Artificial intelligence continues to drive significant market movements and strategic decisions across the tech industry. Morgan Stanley analysts predict Meta Platforms stock could surge by 42 percent, setting a $904 price target, largely due to its substantial AI investments. These investments are enhancing user engagement and ad targeting across Facebook, Instagram, and WhatsApp, while also improving operational efficiency and supporting future metaverse experiences. Analyst Dhierin Bechai also highlights Meta's AI efforts, including its open-source LLaMa model, as a key growth driver, even as the company expects 18 percent annual EBITDA growth to offset high spending. While Meta's peers like Microsoft, Amazon, and Alphabet show greater diversification, Meta's focused AI strategy positions it strongly. Meanwhile, SoftBank Group CEO Masayoshi Son explored an ambitious acquisition of Marvell Technology Inc. for over $100 billion, aiming to integrate it with Arm Holdings Ltd. to bolster SoftBank's AI ambitions in chip design for data centers, cars, and networking. Tesla shareholders have also given their advisory support for the company to explore an investment in xAI, Elon Musk's AI venture founded in July 2023, which developed the Grok chatbot. This move, which Musk previously indicated he would have made sooner if it were solely his decision, aims to give Tesla more control over its AI future, despite past conflict of interest concerns with investments like SolarCity. In the investment world, billionaire David Tepper's Appaloosa Management has made significant bets on AI-related stocks, with Intel representing 2.8 percent of his fund after seeing a recent surge. However, legendary investor Michael Burry, known for predicting the 2008 housing crash, has taken a cautionary stance, placing over $1.1 billion in put options against Nvidia and Palantir Technologies. This move triggered a substantial market reaction, wiping out $685 billion from these AI companies and raising concerns about a potential AI bubble. OpenAI's CEO Sam Altman has committed to massive spending, pledging $1.4 trillion for datacenters. While analysts question the affordability, Altman will not be personally liable, and experts suggest providers like Oracle and Amazon might renegotiate contracts rather than see OpenAI fail, as many agreements are tied to usage or performance milestones. Altman believes the greater risk lies in not securing enough computing power for future AI models. Among other AI players, Datadog, a cloud monitoring and analytics company, reports strong growth, with its AI investments enhancing its tools for problem detection and automation. Conversely, C3.ai, an enterprise AI software provider, recently reported a tough quarter with revenue dropping nearly 20 percent to $70.3 million. Founder Thomas Siebel stepped down as CEO, with Stephen Ehikian taking over on September 1, as investors hope for improved financial performance. Despite C3.ai's struggles, smaller AI companies like BigBear.ai Holdings, offering AI decision intelligence, and SoundHound AI, developing voice AI, continue to attract investor interest, trading at around $4 and $7 respectively.

Key Takeaways

• Morgan Stanley predicts Meta Platforms stock could rise by 42 percent, reaching a $904 price target, driven by its significant AI investments.
• Meta's AI initiatives, including its open-source LLaMa model, enhance user engagement and ad targeting across Facebook, Instagram, and WhatsApp.
• SoftBank Group CEO Masayoshi Son explored a $100 billion acquisition of Marvell Technology Inc. to integrate with Arm Holdings Ltd. for AI chip development.
• Tesla shareholders voted to support exploring an investment in Elon Musk's AI company, xAI, which developed the Grok chatbot.
• Billionaire investor David Tepper has invested in Intel, making it 2.8 percent of his fund, following a recent surge in the company's stock.
• OpenAI CEO Sam Altman committed $1.4 trillion to datacenter spending, with providers like Oracle and Amazon potentially renegotiating contracts if commitments are not met.
• Investor Michael Burry placed over $1.1 billion in put options against Nvidia and Palantir Technologies, leading to a significant market drop and raising concerns about an AI bubble.
• C3.ai, an enterprise AI software provider, reported a nearly 20 percent revenue drop to $70.3 million, with Stephen Ehikian taking over as CEO.
• Datadog shows strong growth and better-than-expected earnings, with AI investments enhancing its cloud monitoring and analytics tools.
• Small AI stocks like BigBear.ai Holdings and SoundHound AI are attracting investor attention for their growth potential in enterprise and voice AI.

Morgan Stanley predicts 42 percent growth for Meta due to AI

Morgan Stanley analysts predict Meta Platforms stock could rise by 42 percent. Analyst Brian Nowak set a $904 price target, showing strong belief in Meta's future. This growth comes from Meta's big investments in artificial intelligence. AI will improve Facebook, Instagram, and WhatsApp by boosting user engagement and ad targeting. It will also make operations more efficient and help build future metaverse experiences. The market may not fully value Meta's AI impact yet.

Meta's AI investments could boost stock 42 percent

Meta Platforms still relies on digital advertising but invests heavily in AI. Analyst Dhierin Bechai believes AI is a key growth driver, even without direct monetization yet. Meta's AI efforts, including its open-source LLaMa model, improve ads and user experience on Facebook, Instagram, and WhatsApp. Bechai set a $904 price target for Meta, suggesting a 42 percent increase from current levels. Despite less diversification than peers like Microsoft, Amazon, and Alphabet, Meta's AI strategy makes it a strong player. The company expects 18 percent annual EBITDA growth, helping offset high spending.

SoftBank CEO explored $100 billion Marvell chip deal

SoftBank Group CEO Masayoshi Son explored buying Marvell Technology Inc. for over $100 billion. He aimed to combine Marvell with Arm Holdings Ltd. to boost SoftBank's AI goals. Discussions did not go far, and Marvell is not currently talking with SoftBank. Son bought Arm for $32 billion in 2016, planning it as a key part of his AI strategy. Marvell designs chips for data centers, cars, and networking, which are vital for AI. This shows Son's strong belief in the chip industry and his focus on AI opportunities.

Tesla shareholders back xAI investment exploration

Tesla shareholders voted to support the company looking into an investment in xAI. xAI is an AI company also owned by Elon Musk, founded in July 2023, and developed the Grok chatbot. Tesla's General Counsel, Brandon Ehrhart, stated the board will now examine next steps based on this advisory vote. Elon Musk previously said he would have invested in xAI long ago if it were solely his decision. Some investors, like Stephen Hawk, see this as a way for Tesla to control its AI future. Past investments, like the 2016 SolarCity purchase, caused conflict of interest concerns for Musk.

Three small AI stocks show big growth potential

Many investors are looking for growth in artificial intelligence stocks. Three small AI companies, all trading under $20, show potential for significant growth. C3.ai provides enterprise AI software to large companies like Shell and Baker Hughes, currently priced around $18. BigBear.ai Holdings offers AI decision intelligence for government and commercial clients, trading at about $4. SoundHound AI develops voice AI for devices like smart speakers and cars, with its stock around $7. These stocks offer attractive opportunities for investors seeking growth in the AI market.

David Tepper invests in two key AI stocks

Billionaire investor David Tepper has invested a significant part of his fund, Appaloosa Management, in two AI-related stocks. He is known for finding undervalued companies and has seen success with Alibaba Group. Tepper's fund bought Alibaba shares in mid-2022, and the stock has since more than doubled. Alibaba remains his largest holding, making up 12.4 percent of his portfolio, though he recently sold some shares. Intel is his second major AI-related investment, representing 2.8 percent of his fund. Intel has also seen a recent surge after years of struggles and new leadership.

New CEO aims to turn around C3.ai stock

C3.ai stock, despite its AI ticker, has lost half its value this year. The company recently reported a tough quarter, with revenue dropping nearly 20 percent to $70.3 million. Founder Thomas Siebel stepped down as CEO due to health, and Stephen Ehikian took over on September 1. Ehikian previously helped build companies like RelateIQ and Airkit.ai, which Salesforce later bought. Investors hope the new leadership can improve C3.ai's financial performance and path to profit. The stock's low expectations might allow for a positive surprise in future earnings reports.

Datadog shows strong growth with AI investments

Datadog, a cloud monitoring and analytics company, reported better-than-expected earnings. This suggests the company is doing well despite a slowdown in overall cloud spending. Datadog's platform helps businesses monitor performance and secure their cloud-native applications. The company's investments in artificial intelligence are paying off, enhancing its monitoring and analytics tools. AI-powered features help customers find problems, predict issues, and automate solutions. Datadog is well-positioned for future growth as companies adopt more AI-driven applications.

Sam Altman not liable for OpenAI's huge spending

OpenAI CEO Sam Altman has made huge deals for computing power, committing to spend $1.4 trillion on datacenters. Analysts question how OpenAI can afford this, as its revenue would need to reach $577 billion by 2029. However, Altman will not be personally responsible if the company cannot meet these commitments. Experts suggest that providers like Oracle and Amazon might renegotiate contracts rather than see OpenAI fail. Many contracts are complex and tied to usage or performance milestones, allowing for flexibility. Altman believes the bigger risk is not having enough computing power for future AI models.

Michael Burry bets against AI stocks, market reacts

Legendary investor Michael Burry, known for predicting the 2008 housing crash, has bet against AI stocks. His firm, Scion Asset Management, bought over $1.1 billion in put options against Nvidia and Palantir Technologies. Following this news, Nvidia's market value dropped by 4 percent, and Palantir's fell by 8 percent in three days. This sell-off wiped out $685 billion from these AI companies, marking the steepest AI-related drop since 2023. Burry's move raises concerns about a possible AI bubble, similar to the dot-com bubble. His actions are closely watched and have injected caution into the AI market.

Sources

• Meta Platforms Poised for 42% Upside as AI Investments Drive Next Growth Phase
• Meta Platforms Poised for 42% Upside as AI Investments Drive Next Growth Phase
• SoftBank's $100B Chip Play? Marvell Deal Buzz Sends Shockwaves Through AI Investing World
• Tesla will 'examine' an investment in Elon Musk's xAI
• 3 Small AI Stocks Ready to Explode (All Under $20)
• Billionaire David Tepper Has 15% of His Portfolio Invested in These 2 Artificial Intelligence (AI) Stocks
• Can C3.ai Be a Good Contrarian Stock?
• AI Trade Over? Datadog Results Say It's Gaining Momentum
• Why Sam Altman Won’t Be On The Hook For OpenAI’s Massive Spending Spree
• Michael Burry effect? Short legend bets against AI, and $685 billion vanishes from Nvidia and Palantir in 3 days