In this article, we will look at the top ten social media companies in the field of artificial intelligence. If you want to skip our experience with social media and artificial intelligence, take a look at Top 5 Social Media Companies in Artificial Intelligence.
While most of 2023 has been marked by concerns about the economy, amid this uncertainty, artificial intelligence has provided investors and businesses with a new technology that has everyone excited. Although it’s commonly thought to be the stuff of science fiction, AI is actually quite simple compared to the autonomous, thinking robots that most people imagine.
AI, in its simplest form, is a set of mathematical formulas and equations that allow a computer to first process large volumes of data in order to determine patterns between variables. Then, when fed a new set of data, these models are used to make decisions and generate new results – the latter also referred to as generative AI. Generative AI is THE technology of 2023 due to its potential for applications across a wide range of industries and business processes.
In fact, the hype around AI and the availability of software and hardware to meet its intensive computing demands is one of the reasons why shares of Meta Platforms, Inc. (NASDAQ: META) have been among best performers this year after being one of the worst performers in 2022. 2022 has not been a good year for most stock and technology companies in particular, as their stocks have been hit by rising stock rates. interest and inflation, raising concerns about a tighter credit environment and a decline in purchasing power. This saw Meta’s stock fall from its 2022 close of $336 to a low of just $90.79, marking a painful 73% drop that also pushed its founder Mark Zuckerberg several rungs down on the scale of the richest in the world.
Fast forward to 2023 and Meta appears to be a resurgent company. The stock is up 143.67% year-to-date and the latest closing price of $303 has allowed it to reverse most of 2022’s losses. After all, a decline in the stock price does not affect the fundamentals of a business, and the fact remains that Facebook is one of the largest social networks in the world in terms of user base. This provides it with a trove of user data to help advertisers run their campaigns, and this potential is also a key reason why stocks have appreciated in the recent AI era.
The bottom line behind a bullish thesis for Meta Platforms, Inc. (NASDAQ: META) is that AI provides unique and enormous opportunities for the company to use its user data to run marketing campaigns and deliver content. As we explained in our introduction to AI above, AI allows users to generate insights, and for Facebook, this suits the company since the large user base provides it with a large amount of data and parameters that most companies do not have access to. Facebook is also no stranger to AI, having used the technology for years for various purposes, such as facial recognition, contextual text analysis, advertising, and business process improvement.
Naturally, AI itself has provided multiple catalysts for Meta stock price this year. One of these came in the form of a share price hike by UBS analysts in June. They increased the target price to $335 from $300 and maintained a Buy rating on the stock. Analysts pointed out that Meta’s decision to use an artificial intelligence chatbot in its products had the potential to increase user engagement, time spent on the platform and advertising revenue that is the bread and butter by Meta. The note pointed out that even if Facebook monetized 5% of search queries in its app, it could generate $7.5 billion in additional revenue for Meta, explaining that this aspect of revenue generation was not incorporated into the price of the stock. This may be one of the reasons why Meta shares have appreciated significantly on the stock market this year.
Another AI-driven catalyst for Meta was the company’s Q2 2023 earnings report. Data showed that the company is investing in AI, and during the earnings call, management shared:
So our growth in AI investments is really driving the growth of our CapEx outlook for 2024. And I think there are several elements to that. There is both the core work of AI, which powers our ranking and recommendation systems, which underpin both much of our content ranking and engagement growth, as well as monetization work and that’s an area where we’re able to measure the ROI of our investments there, and we’re happy with the ROI of those investments and we want to continue to invest appropriately to stimulate revenue growth. At the same time, we are aware of our desire to reduce capital intensity in the long term. There’s also another piece, which is the next generation AI efforts that we’ve been talking about around advanced research and Gen AI and that’s an area where we’re already at training clusters and inference ability, but we don’t know exactly. what we will need in 2024, since we do not yet have large-scale deployments of consumer enterprise features and the extent of adoption of these products will ultimately determine the capacity we need .
We believe both of these will be attractive investment opportunities and that some of the AI capability is fungible. So if we don’t need some of the capacity for our AI generation work, we will be able to allocate it to our core AI work supporting advertising and engagement, but we still working on our plans for 2024, we will. have clearer and more quantitative perspectives as those planned materialize. But we are conscious of our intention to reduce the capital intensity of these investments over time.
But what about other companies that are also using AI to power their business operations? Take a look below to see some of the top social media companies following the AI trend.
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Our methodology
To compile our list of the top social media companies in artificial intelligence, we first compiled a list of all publicly traded social media companies. Then, they were selected based on their current and future AI projects, and the most notable ones are listed below. This list is neither exhaustive nor exhaustive.
Top 10 Social Media Companies in Artificial Intelligence
1. Meta Platforms, Inc. (NASDAQ: META)
Latest market capitalization: $782 billion
Meta Platforms, Inc. (NASDAQ: META) is arguably the most powerful social media player when it comes to artificial intelligence, as we explained in detail above. The company also recently launched a new pair of smart glasses, which feature a wearable form factor and augment the real-time viewing experience with augmented reality.
At the end of the second quarter of this year, 225 of the 910 hedge funds in Insider Monkey’s database owned a stake in Meta Platforms, Inc. (NASDAQ: META). Among them, the company’s largest shareholder is Peter Rathjens, Bruce Clarke and John Campbell. Arrowstreet Capital since she owns ten million shares worth $3 billion.
2. Tencent Holdings Limited (OTCMKTS:TCEHY)
Latest market capitalization: $365 billion
Tencent Holdings Limited (OTCMKTS:TCEHY) is a Chinese company and technology giant. It owns two of China’s largest social media platforms, namely WeChat and QQ. While it is also launching its business-focused AI model Hunyuan, WeChat is well known for integrating AI into the service for facial recognition and security features.
3. NetEase, Inc. (NASDAQ:NTES)
Latest market capitalization: $63.57 billion
NetEase, Inc. (NASDAQ: NTES) is a Chinese technology company that offers games and other services, including a music social platform that allows users to communicate with each other through music and build communities. The company operates its NetEase Fuxi Lab which develops AI and also deploys AI to create new real-time experiences for users playing its games.
As of June 2023, 25 of 910 hedge funds surveyed by Insider Monkey held shares of the company. The largest hedge fund investor in NetEase, Inc. (NASDAQ: NTES) is that of Panayotis Takis Sparaggis. Alkéon Capital Management due to a $210 million stake.
4. Pinterest, Inc. (NYSE: PIN)
Latest market capitalization: $17.74 billion
Pinterest, Inc. (NYSE: PINS) is a popular social media network that allows people to share images. The company made a significant investment in AI in September when it revealed it was using AI to identify body types and make the platform exclusive for everyone.
During the second quarter of 2023, 62 hedge funds out of 910 tracked by Insider Monkey were investors in Pinterest, Inc. (NYSE:PINS). Paul Singer Elliott Management is the largest shareholder among these, as it owns $765 million worth of shares.
5. Snap Inc. (NYSE: INSTANT)
Latest market capitalization: $13.89 billion
Snap Inc. (NYSE: SNAP) is another popular social media platform that allows users to stay up-to-date with each other’s daily activities, regardless of distance. Its AI chatbot is powered by ChatGPT and allows users to initiate a conversation and ask for recommendations.
29 of the 910 hedge funds in Insider Monkey’s database had purchased shares of the company in the second quarter of 2023. Snap Inc. (NYSE: SNAP) is Karthik Sarma’s largest hedge fund shareholder. SRS Investment Management owns 52.6 million shares worth $623 million.
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Disclosure: None. Top 10 Social Media Companies in Artificial Intelligence was originally published on Insider Monkey.
