Meta Platforms (NASDAQ:META) shares have faltered recently. Investors haven’t been impressed with its artificial intelligence (AI) strategy.
The company, however, just unveiled its new AI agents. So is this the moment the stock market has been waiting for?
AI strategies
AI has been the stock market’s main focus recently. And investors have been wary of Meta’s approach.
Alphabet, Amazon, and Microsoft have been spending heavily on data centres. And it looks like those investments are paying off.
Apple has taken a different approach. It isn’t selling computing power, but it’s also avoided the massive setup costs.
Meta, however, seems to have the worst of both worlds. It’s been spending heavily on data centres, but it isn’t making sales to customers.
The firm has been using its huge computing power internally. So investors have been wary of the risk that this won’t pay off.
Meta’s AI agents
In that context, Meta’s new AI agents are hugely important. They represent the firm’s way to make a return on around $90bn of investments.
What do they do? In short, they’re designed to speak to users across Meta’s social media platforms on behalf of advertisers.
They can close sales, manage bookings, and create reports for managers. And companies can build and deploy these agents themselves.
When you click on an advert on Facebook, it won’t just take you to a company’s site. It’ll open a WhatsApp chat with an AI agent.
It’s a big change. And it might give Meta shareholders something they’ve wanted for a long time – a monetisation strategy for WhatsApp.
Will anyone use them?
Meta’s AI agents look like a powerful tool. But there are some open questions to think about.
Even the best AI models are currently prone to hallucinations. So who’s responsible if – or when – mistakes happen?
The obvious answer is the advertiser. Meta can probably build this into its terms of service, but that comes at a cost. That gets Meta off the hook. But it makes the AI agents much less attractive to customers.
This has been a key question about AI agents. Will companies actually be willing to take the risk on them?
What does the future look like?
One interesting case is RWS. It’s a translation business, which is one of the things AI can clearly do well.
RWS focuses on things like medical instructions and patent documents. In these cases, there’s a lot at stake if things go wrong.
Despite this, the firm has been losing ground to AI translators. It’s been relegated from creating documents to correcting errors.
That might be how Meta’s agents work. Even with a manual final check, AI might handle most of the interaction.
In that case, there might still be value for businesses. But despite the stock market’s positive reaction, there’s still a lot to think about.
The start of a comeback?
Meta’s approach to AI has seen its share price falter, but it’s showing signs of paying off. It’s making real products that can add value for customers.
There are still other risks with the company. Top of these is the ongoing lawsuits concerning the addictive nature of its platforms.
Nonetheless, the new AI agents look like a really promising development. So investors might want to take another look at the stock.
Should you invest £5,000 in Meta Platforms right now?
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Stephen Wright owns shares in Amazon and Microsoft.
The post Are Meta shares at the start of a comeback? appeared first on The Twelfth Magpie.
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