The narrative of "AI monetization" by tech giants, the market is more willing to believe in Meta

According to Zhitong Finance, Meta Platforms (META.US) is indeed a tech giant that has recently made significant investments in the field of artificial intelligence and has won favor from investors as a "benchmark". Despite the company announcing a significant increase in capital expenditures and pledging to invest more funds in the future, the company's stock price rose by 13% this month, far outperforming other tech giants; at the close on Wednesday, it was down by less than 1% from last month's record closing price.

What sets Meta apart from other tech giants is that Mark Zuckerberg is doing better, convincing investors that artificial intelligence is helping improve its core business - digital advertising performance. In contrast, other companies such as Amazon (AMZN.US), Microsoft (MSFT.US), and Alphabet (GOOGL.US) have not yet articulated a strong revenue narrative in the field of artificial intelligence.

Gene Munster, managing partner of Deepwater Asset Management, said: "This is the best earnings conference call Zuckerberg has had as CEO of a public company. He explained the short-term benefits, long-term benefits of artificial intelligence, and when all of this will come into play. He did it in a convincing way."

Meta has been using artificial intelligence to improve the way advertising clients find interested users, increase business efficiency, and this business almost constitutes all of the company's revenue. The company also uses proprietary large language models to provide better content recommendations, helping to drive interaction between Facebook and Instagram.

As a result, the company's second-quarter earnings per share and revenue easily exceeded analysts' expectations, prompting Morgan Stanley analyst Doug Anmuth to say that Meta "continues to qualify for significant investment in GenAI".

Meanwhile, investors are becoming increasingly dissatisfied with spending by other large tech companies. After Alphabet, Google's parent company, released its earnings report last month, its stock price performed poorly. The report showed that while profits and revenue exceeded expectations, capital expenditures were higher than expected. The same goes for Microsoft, as the company's previously released financial report showed that the growth of its Azure cloud computing business is slowing down.

After Alphabet released its earnings report on July 23, the stock price fell by 9%, while Microsoft has remained relatively flat since releasing its performance on July 30. Alec Young, Chief Investment Strategist at Mapsignals, said: "Google is kind of saying, 'Well, we have to spend money to keep up with everyone.' Microsoft is a little better, but they're actually doing the same thing." Of course, Meta has also been a "frequent target" of Wall Street punishment in the past. Just a quarter ago, the company raised its capital expenditure expectations while sales growth fell below expectations, causing its stock price to plummet. Previously, the company also disastrously turned to the so-called "metaverse economy," which requires a large amount of expenditure with little hope of short-term returns, leading to the stock losing nearly two-thirds of its value in 2022.

According to data, Apple (AAPL.US), Microsoft, Alphabet, Amazon, and Meta all increased their capital expenditures in the quarter ending in June, bringing their total spending to a record $55 billion, a 55% year-on-year increase. Global X ETFs investment strategist Andrew Ye said, "Meta has been and will continue to heavily invest in generative artificial intelligence, but it can be said that it articulates its vision for AI integration more clearly than its competitors."