#SocialStocks: Meta and others commit to AMD’s AI chip

Threads set to launch in EU, Snapchat+ users given new AI features and other notable stories from this week

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

THREADS INTEROPERABILITY: 

Meta Platform’s (META) promise to support open-source protocol ActivityPub, for the operation of Mastodon and other decentralized social media platforms, is beginning to materialize, Karissa Bell wrote for Engadget. “Making Threads interoperable will give people more choice over how they interact and it will help content reach more people…I’m pretty optimistic about this,” said Mark Zuckerberg in a post on Threads, added the Engadget story.

SNAPCHAT+ AI FEATURES: 

In an earlier release on Tuesday, Snapchat (SNAP) said: “More than seven million Snapchatters have joined Snapchat+, our subscription tier that offers access to the latest features that help Snapchatters customize their app experience, get creative, and have even more fun with friends. There are already so many ways for Snapchat+ members to express themselves with AI, whether they’re creating an original Generative AI Bitmoji Background or Chat Wallpaper, transforming themselves in imaginative ways with Dreams, or learning about the world through conversation with My AI. Now we’re offering subscribers even more ways to create, edit, and capture images that inspire continued connection through visual conversation: In just a few words, use AI to create and send a Snap of whatever you know will make a friend’s day, even when the perfect scene is out of sight…If you accidentally zoomed in too close, the AI powered extend tool on our camera to broaden your Lens for the “full picture”…Plus Dreams, the imaginative Generative AI selfies, are now more fun when made with friends, and Snapchat+ subscribers get one free pack of 8 Dreams a month….These features are rolling out now, regional availability may vary. As with all of our features, we are committed to offering a safe, fun, and privacy-centric experience on Snapchat. We can’t wait to see what our subscribers create. Happy Snapping!”

NEW THREADS: 

Instagram’s Threads will be available to users in the European Union on December 14, The Verge’s Jess Weatherbed reported Friday, citing an untitled countdown timer on the Threads site. European Instagram users can also search the term “ticket” in the app to reveal a digital invitation to Threads along with a scannable QR code and launch time.

LAWSUIT LATEST: 

Attorney General Raul Torrez filed a lawsuit against Meta Platforms, CEO Mark Zuckerberg, and the company’s wholly-owned subsidiaries, including Instagram and Facebook Holdings, to protect children from sexual abuse, online solicitation, and human trafficking. New Mexico AG Torrez said in part: “Our investigation into Meta’s social media platforms demonstrates that they are not safe spaces for children but rather prime locations for predators to trade child pornography and solicit minors for sex,” said Attorney General Torrez. “As a career prosecutor who specialized in internet crimes against children, I am committed to using every available tool to put an end to these horrific practices and I will hold companies – and their executives – accountable whenever they put profits ahead of children’s safety.”

MESSENGER ENCRYPTION: 

Meta announced that it is rolling out default end-to-end encryption for personal messages and calls on Messenger and Facebook, as well as a suite of new features to further control users’ messaging experience. Since 2016, Messenger has had the option for people to turn on end-to-end encryption, but Meta is now changing private chats and calls across Messenger to be end-to-end encrypted by default. This means that nobody, including Meta, can see what’s sent or said. “End-to-end encryption gives people more secure chats in Messenger. These chats will not only have all of the things people know and love, like themes and custom reactions, but also a host of new features we know are important for our community. These new features will be available for use immediately” Loredana Crisan, Head of Messenger said.

AI CHIPS: 

AI development costs may be moderating amid a potential dislocation in the AI chipset industry as “tech giants Meta, OpenAI, and Microsoft (MSFT) announced their commitment to AMD’s (AMD)” new and possibly cost-effective AI chip, BNN wrote. AMD’s new AI chip, the Instinct MI300X, which is to begin shipping early in 2024, looks to rival Nvidia’s (NVDA) CUDA software, “a favorite among AI developers, by improving its ROCm software suite,” noted the BNN story.

ANALYST COMMENTARY: 

Wells Fargo upgraded Snap to Overweight from Equal Weight. The analyst sees advertising positively inflecting at Snap for first time since Apple’s privacy initiatives in April 2021. The company’s reinvestment in advertising tech stack, new ads management and renewed focus leads to increased estimates materially above the Street, the analyst told investors in a research note. Wells believes changes made over the past several months have meaningfully narrowed Snap’s ad product gap relative to other audience platforms. It views Snap’s recent product and ads leadership makeover as key to faster product innovation and revenue reacceleration.

RBC Capital upgraded Pinterest (PINS) to Outperform from Sector Perform. Pinterest “stands out” as a way to play the shift of intent-based advertising platforms chasing impulse shopping’s $241B ad spend, the analyst tells investors in a research note. The firm believes Pinterest is an attractive story underpinned by channel checks indicating key product cycles starting to work, positive ad load analysis and attractive comps.

BofA kept a Buy rating on Meta. The firm states that the company’s AI announcements and deeper integration of AI chatbots support its thesis that AI driven innovation at Meta will lead to new user experiences and recurring revenues models.

Baird analyst Rob Oliver raised the firm’s price target on Sprout Social (SPT) and maintained an Outperform rating on the shares. The firm met with management and came away from the meetings comfortable with their bullish thesis with key takeaways regarding the competitive landscape, CRM opportunity, and investor interest levels.

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Originally Posted December 2023 – #SocialStocks: Meta and others commit to AMD’s AI chip