Meta Platforms (formerly known as Facebook) and Microsoft are two tech giants that have been making significant strides in the field of artificial intelligence (AI). Both companies have been leveraging AI tools to enhance their offerings and drive growth in various sectors.
When it comes to AI applications, Meta Platforms seems to have taken the lead, with its stock jumping 82% in the past year compared to Microsoft’s 29% gain. Meta has been integrating AI tools into its social media apps to drive tangible gains for advertisers, allowing them to create, manage, and optimize their ad campaigns more effectively.
Meta’s revenue from AI-focused tools has more than doubled, with CEO Mark Zuckerberg noting that the company’s Advantage+ Shopping and Advantage+ App Campaigns have seen significant growth. The adoption of Meta’s AI tools by advertisers has been on the rise, leading to improvements in ad impressions and revenue. As a result, Meta’s ad revenue increased by nearly 27% in the first quarter of 2024.
On the other hand, Microsoft has also been capitalizing on the AI wave, particularly in cloud computing and personal computers. The company’s cloud market share has been on the rise, thanks to AI innovations that have driven growth in revenue. Additionally, Microsoft’s Copilot chatbot has been gaining traction among users, with subscriptions expected to generate significant revenue in the coming years.
Despite Microsoft’s underperformance compared to Meta in the past year, the company remains a solid bet on the proliferation of AI. Microsoft’s diverse AI-related catalysts, from cloud computing to AI-enabled PCs, position the company for long-term growth in the AI space.
In conclusion, while Meta Platforms may currently exhibit stronger growth rates and a more attractive valuation compared to Microsoft, both companies offer promising opportunities in the AI space. Investors looking to capitalize on the AI boom may consider Meta as the better bet based on current growth rates, while Microsoft presents a more diversified option for those willing to look past its higher valuation. Ultimately, both tech giants are well-positioned to benefit from the increasing adoption of AI technologies across various industries.
