Talk about a turnaround for Meta Platforms. Having spent most of the year as an underachieving stock, the launch of its Muse agent has catapulted it higher. But chip stocks are still the surer path for those betting on the artificial-intelligence race.
Meta added a cool $192 billion to its market value on Monday. The market is excited about the early popularity of Muse, an AI agent that can book a doctor's appointment or reserve a flight, among many other things. Turns out if you have a product which appeals to consumers that tends to override having absolutely cutting edge tech-a lesson the social-media company learned long ago.
But there's no guarantee the good times will last. Competitors are sure to come out with their own consumer agents and might even look to cut Meta's service off from using their own services. Amazon has already blocked Muse from making purchases on its e-commerce platform. And it's still not clear how many people would be willing to pay for Muse.
Luckily, there is one group of stocks which will benefit no matter who wins in the AI agent race-chip companies. Intel, Arm and Advanced Micro Devices all surged on Monday in expectation that millions of constantly running AI services will supercharge demand for their central-processing units to power them. Qualcomm and Nvidia can also expect benefits as they push into the CPU market.
The nature of the AI boom so far has been that it's hard to predict which model developer is in the lead at any given time but easy to bet it will all end up needing vastly more computing power. Investors should remember that and place their bets accordingly.
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