Seemingly every day so far in 2023, there’s a new hot story surrounding Wall Street’s shiny new toy, artificial intelligence (AI). It’s remained at the forefront of market topics all year, and it’s more than reasonable to assume the trend will stay the same for some time as we continue wading through the initial excitement.
And just recently, several market heavyweights, including Meta Platforms META and Amazon AMZN, have grabbed attention following recent AI announcements. Both stocks have helped lead the market’s surge in 2023, as we can see illustrated below.
Image Source: Zacks Investment Research
But what’s there to like surrounding the recent announcements? Let’s take a closer look.
Amazon
Just earlier, it was revealed that Amazon will invest up to $4 billion in Anthropic, an AI safety and research company based in San Francisco and a rival of OpenAI.
The deal reflects a partnership to develop reliable and high-performing foundation models, with AWS now becoming Anthropic’s primary cloud provider for critical workloads. According to Anthropic, the investment will provide the resources needed to continue training state-of-the-art models, which require substantial computing power and research programs.
Given strong AWS customer demand for Claude (Anthropic’s AI chatbot), Anthropic is also now expanding its support of Amazon Bedrock. Amazon Bedrock is a service that simplifies access to advanced AI models created by Amazon and other AI startups, allowing users to pick what fits their needs best.
It’s another exciting development for Amazon as it continues its AI journey, and the market has had positive reactions so far as well – AMZN shares are up roughly 1% in today’s session so far, adding to their impressive 56% YTD gain.
Analysts have taken a notably bullish stance on the company’s earnings outlook, helping land Amazon into the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Keep an eye out for the company’s upcoming release expected in late October, as the Zacks Consensus EPS Estimate of $0.58 suggests 190% growth from the year-ago period.
Meta Platforms
Meta Platforms is hosting its Meta Connect event this week, a two-day event that kicks off this Wednesday. It’s primarily focused on the company’s latest products (including Meta Quest 3), with attendees also receiving a detailed peak behind the scenes at the company’s latest AI innovations.
Those who join will hear the latest on the company’s developer ecosystem, including updated programs and features across AI, VR, MR, AR, Meta Horizon Worlds, and Meta Avatars. Chaya Nayak, product manager of Generative AI Data & Safety, will be speaking.
Back in February, Zuckerberg announced the creation of a new top-level product group focused on generative AI, wanting to develop delightful experiences surrounding the technology. He noted that the company would also be concentrating on creating AI personas to assist people through text chats in WhatsApp and Messenger, which we could see revealed this week.
Like AMZN, Meta Platforms’ earnings outlook has shot higher over the last several months.
Image Source: Zacks Investment Research
It’s worth noting that META shares aren’t valuation stretched given the company’s forecasted growth, with earnings forecasted to climb 35% in its current year on 14% higher revenues. Shares presently trade at a 22.6X forward earnings multiple (F1), modestly beneath the 23.1X five-year median.
Bottom Line
Artificial intelligence hype isn’t going anywhere anytime soon, with heavyweights Meta Platforms META and Amazon AMZN recently grabbing market headlines again following announcements surrounding the technology.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Image and article originally from www.nasdaq.com. Read the original article here.