Big Tech’s 2025 is off to a rough start. Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) missed Wall Street’s expectations on cloud revenue in their latest quarters; Apple (AAPL) fell short on iPhone sales; and Tesla (TSLA) disappointed on the top and bottom lines.
And that’s weighing on the companies’ stock prices. Google and Microsoft are down 2.7% and $3.3% year-to-date, respectively, while Tesla is off 17%. Apple’s stock has declined 6%. Amazon is up 4.4% during the same period, but, as of Wednesday, is off 1.4% since it reported its earnings on Feb. 7.
But one company is thriving: Meta (META).
The social media giant’s stock is up 22% since the start of the year and, as of Wednesday, is riding a 17-session winning streak on Wall Street. Why is Meta performing so well when other hyperscalers are falling?
It’s certainly not because its rivals are plowing money into AI investments. Sure, Amazon said it plans on capital expenditures north of $100 billion in 2025, and Google and Microsoft will shell out $75 billion and $80 billion, respectively. But Meta also plans to splash huge sums on the technology, saying it’ll pour between $60 billion and $65 billion into capital expenditures this year.
It’s simpler than that. While its Big Tech rivals are spending to draw outside customers, Meta’s spending will power its own growth.
“I think Meta may actually be the most consequential company of our time right now, and I think it’s because they are the ultimate customer zero,” explained Futurum Group CEO Daniel Newman. “Nothing they are doing as a hyperscaler is merely for the sake of reselling to others.”
Part of the reason Meta’s AI investments are paying off on Wall Street is because the spending directly benefits the company’s ad sales and time users spend on its platforms.
“They’ve used [their AI investments] largely to drive their business where … other companies have been trying to be a little bit more all things to all people,” explained Zeus Kerravala, founder and principal analyst at ZK Research.
The benefit to Meta’s approach is clear in its early results. According to CEO Mark Zuckerberg, AI is impacting virtually all of the company’s work.
“Improvements to our AI-driven feed and video recommendations have led to an 8% increase in time spent on Facebook and a 6% increase on Instagram this year alone,” Zuckerberg explained during the company’s Q3 earnings call in October.
And during Meta’s Q4 call, CFO Susan Li said 4 million advertisers are using the company’s generative AI tools to create ads, up from 1 million six months ago. All of that makes AI an easier sell for investors.
