META released its latest model of Llama Large Language Model (LLM) and it has forced both Google and Amazon to rethink their LLM strategy. The new Llama 3.3 70B model outperforms Google’s Gemini 1.5 Pro and GPT-40 and Amazon’s Nova Pro on various benchmarks. Despite this outperformance, both Google and Amazon stocks showed little signs of distress.

There’s a good reason why those two peers took no notice of Meta’s progress. Google recently released Gemini 2.0 LLM. The early version of this model is two times faster than the current Gemini 1.5 Pro. The 2.0 version also features text-to-speech and image-generation capabilities. However, these features aren’t yet available to the general public.

Google’s Gemini 2.0 is also trained to utilize tools, which means it would be an integral part of the company’s progress on agentic AI. For those who don’t know, agentic AI is the automation of AI itself. Currently, users have to input data to Google Gemini to receive an AI-powered response. Agentic AI systems will be able to decide for themselves when to initiate a task, when to finish it, and how to go about making these decisions. In short, it is autonomous AI.

Google is also experiencing tailwinds on the back of its Willow quantum computing chip introduced last month. The chip is expected to revolutionize how quantum computing works, even though practical applications are still unclear.

Quantum computing works on the basis of qubits: bits that can have an on-and-off state at the same time. Increasing the number of qubits in a system increases the likelihood of errors. However, the Willow chips work the other way around and reduce the chances of error as more qubits are added to the system. On the back of this success, the stock was unlikely to face any selling pressure just because Meta introduced a more powerful LLM.

It must also be considered that training LLMs is not the highest priority for analysts right now. Wall Street now wants to see what these models are capable of delivering. Everyone has their eye set on autonomous vehicles, humanoid robots, and AI agents. Analysts want companies to deliver on their AI investments and stop the mad dash to train better models. Any company coming up with a more powerful Large Language Model is unlikely to generate any excitement. It’s now all about AI applications.

Meta Platforms is 3rd on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 235 hedge fund portfolios held META at the end of the third quarter which was 219 in the previous quarter. While we acknowledge the potential of META as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.