Artificial intelligence (AI) has captivated investors since ChatGPT burst onto the scene with its viral popularity in early 2023. Since then, big technology companies, often called the “Magnificent Seven” stocks, have duked it out with massive AI investments and rising growth expectations that carried the broader stock market to new highs.
Lately, however, volatility crept back into the markets, and many of these highfliers have sold off from their highs.
Remember that volatility is a feature of investing, not a bug. Nobody knows what stock prices will do in the short term, but the sell-off could be a great long-term buying opportunity for the right stocks.
Which Magnificent Seven stocks should investors focus on? Here’s a prediction: Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT) will emerge as the AI stocks everyone wishes they bought during this sell-off.
Here is why.
Meta has the inside track on the AI race
Social media giant Meta Platforms has arguably everything a company needs to build a dominant business around artificial intelligence (AI). You need a ton of data to train AI models, and Meta has tons of first-party data on the 3.27 billion people who log on to Facebook, Instagram, WhatsApp, or Threads daily.
AI models require tons of computing power. Nvidia has enjoyed tremendous success as the go-to supplier for AI chips. Meta has accumulated nearly 600,000 of Nvidia’s flagship H100 GPUs and is designing its own custom chip.
Lastly, Meta has developed its own AI models. Llama is Meta’s large language model, which it’s implementing throughout its apps and making available to other developers to build on. Add it all up, and Meta is building an AI ecosystem over which it has complete control.
Not many AI technology companies can do it all like Meta can. For example, Nvidia’s chips serve a specific purpose in AI: computing. Apple has excellent distribution through iOS devices but sought help from OpenAI’s AI models. Alphabet has similar advantages to Meta, but it’s facing regulatory scrutiny for its monopoly on internet search.
The best part about Meta…
..
