DeepSeek, a Chinese artificial intelligence (AI) model, upended the U.S. AI sector over the weekend when a new release showed performance comparable to OpenAI’s models for a fraction of the power and price. AI stocks fell today as many companies scrambled to learn how DeepSeek achieved the results it did and called into question the performance and efficiency of U.S. AI companies.
Meta Platforms (META) wasn’t immune to this, as the newest version of DeepSeek outclassed its Llama AI. Not only does it perform better than the current version of Llama, but insiders are worried it will outperform the newest version, which will be released this quarter. That would be an obvious blow to the company’s AI development.
Even more surprising than the performance of DeepSeek is the form of its release. The new models that came out over the weekend are open source. This means they are freely distributed and allow for development and modification by anyone. That makes them largely attractive to developers who can improve on the models or mold them to their own uses. This also benefits DeepSeek as it can integrate these changes into its main models.
What This Means for META Stock
Meta Platforms isn’t doing the best today as investors react to the DeepSeek release. Shareholder confidence was rattled by the news, which sent META stock down 1.69% in pre-market trading. There are concerns that Meta Platforms, as well as other AI companies, could suffer additional headwinds from the DeepSeek release.
Is META Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Meta Platforms is Strong Buy based on 40 Buy, three Hold, and one Sell rating over the last three months. With that comes an average price target of $692.23, a high of $811, and a low of $530. This represents a potential 6.91% upside for META shares.
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