Meta Platforms stock tumbled further in Tuesday trading amid another rough day for major tech stocks. News that the Facebook parent's AI models had reached 1 billion downloads was not enough to reverse Meta stock's decline.
Meta stock fell 3.7% to close at 582.36 on the stock market today. Meta dipped down to 579.92 in intraday trading, its lowest point since Nov. 29.
Shares are also just 2% above Meta's 200-day moving average. Meta has not fallen below the long-term trendline since Jan. 31, 2023, amid a 380% rally since the start of that year.
Meta AI Model Reaches 1 Billion Downloads
The slump for Meta deepened despite the company announcing an AI milestone Tuesday. The tech giant said Tuesday that its open-source AI models, called Llama, had reached more than 1 billion downloads.
The Llama models are free for developers to download and use to build applications. Chief Executive Mark Zuckerberg open-source strategy raised some eyebrows among investors when it was announced two year ago. But Llama's growth helped power a two-year rally for Meta stock, with Zuckerberg telling investors during recent earnings calls that the company had several avenues to monetize its AI development.
"When other companies and developers test and build on top of AI, we get to learn from their innovations, which in turn lets us improve our own models," read a company blog post Tuesday announcing the milestone. "The only way for Llama to become an industry standard is if it remains consistently competitive, efficient, and open generation after generation."
In May 2024, Meta said its Llama models had been downloaded more than 170 million times.
Meta Stock Slide Continues
Amid concerns about tariffs and declining consumer sentiment, Wall Street is weighing how tech stocks could weather a slowdown.
KeyBanc Capital Markets analyst Justin Patterson on Tuesday lowered his price target for Meta to 710, from 750. He similarly lowered his target on Google-parent Alphabet to 202 from 220.
Patterson said he was lowering his estimated price-to-earnings multiple for advertising stocks in response to "greater macro uncertainty."
Meta and Google both specialize in performance-based online advertising that is "typically the last to be cut" by businesses, Patterson noted. But there are still risks to monitor as both companies spend big toward AI ambitions, he added.
"Any slowdown in top line is occurring against an expense base with a heavy fixed-cost component (AI data center and engineers)," Patterson wrote. "Since expense cuts already occurred in 2023 and the AI investment cycle is still strong, earnings power is likely more pressured throughout this cycle."
The recent slide is a significant reversal for Meta. A strong Q4 earning report helped sustain a record 20-day winning streak from late January until Feb. 14. Shares peaked with a Valentine's Day high of 740.91.
But Meta has given back all the gains from that streak and is down 13% so far in March. That would mark Meta's worst monthly performance since October 2022.
