Meta (META) has quickly turned its story around. After its last earnings the stock looked like it was going back to the drawing board, yet it now trades at highs and has become a bright spot for an AI trade that went sluggish over the summer.
Meta's edge over Claude and ChatGPT
Meta (META) owns a large part of everyone's day through its social platforms and has made money from that attention for decades. At Meta Connect the company leaned hard into its Muse personal AI agent, third-party connectors, and a new keychain-style device called Charm.
The rival platforms - OpenAI's ChatGPT and Anthropic's Claude - mostly entered through a work setting or through students doing homework. They are not yet woven into people's daily lives. Muse aims to be. It connects an AI agent to stores like Walmart (WMT), Gap (GPS), Sephora, and Best Buy (BBY) - the places where people actually spend their money. Meta's (META) advantage is its huge surface area across Facebook, Threads, and Instagram, plus bets on VR glasses and the more speculative Charm wearable. If those pan out, AI gets embedded directly into where people live and spend time. That is the difference from Anthropic and OpenAI.
Since Meta Connect, Meta's social platforms have run wall-to-wall ads for Muse. Whether people get engaged and drive traction is the key thing to watch. I am broadly bullish on the direction.
Trust and frictionless buying
Instagram already reshaped user behavior. It started as photos posted in chronological order, then Meta (META) curated the feed, added Stories, and folded in advertising and shopping. Buying through an ad or an affiliate link on an Instagram post would have seemed laughable 5 to 10 years ago; now it is a normal part of daily shopping.
Consumer trust matters as much as the tech. Meta (META) can let users apply existing credentials to sign up elsewhere, the way Alphabet (GOOGL) and Apple (AAPL) logins work. That trust, built over 10 to 15 years, is what the business-focused ChatGPT and Claude lack on the consumer side.
The clearest example is beauty. A large Instagram community follows cosmetics trends. Connecting Muse to Sephora can make the path from spotting a trend to completing a purchase seamless, pulling that trust through to close the sale. That is where the value is created.
Charm and smart glasses
The wearable form factor has been tried many ways - pendants, lapel clips, watches, and now this keychain Charm device. I applaud the innovation, which is more than most big tech firms are showing outside software right now, but whether Charm catches on is unproven and I am less convinced.
The smart glasses are the stronger bet. Meta (META) is now on version three of its Ray-Ban glasses. The Gen 2 pair was clunky; if Gen 3 is less clunky, there is a huge base of daily glasses wearers to reach. Meta also announced FDA approval for the glasses to work as hearing aids for people with mild hearing loss. For someone who wears glasses and needs hearing aids, one device that also describes the world around them and augments their day is a big deal. The continued focus on glasses, wearables, and audio in the Gen 3 announcements is where the real traction sits.
Oracle: bad-news bias vs. fundamentals
AMD (AMD) jumped in relation to the AI trade, but summer worries about heavy cash flow spending returned, with Oracle (ORCL) treated as the face of that leverage risk. A force majeure notice on Oracle hit the news as the less rosy AI story of the day.
The market keeps hunting for bad news on Oracle (ORCL) and is not giving it credit. AWS (AMZN), Google (GOOGL), and Microsoft (MSFT) built their hyperscale cloud businesses over about 20 years. Oracle has done it in roughly 10, so some catch-up is expected. Its OCI cloud has strong momentum. Oracle is placing its infrastructure inside other clouds - OCI running within AWS, Google, and Microsoft. Its solutions can run in smaller footprints than rival hyperscalers, and their sovereign nature matters greatly, especially in Europe. That has driven explosive growth.
Investors are over-rotating on single items like the Blue Owl (OWL) deal and the OpenAI deal while ignoring that Oracle (ORCL) is building a robust, profitable cloud business gaining traction. OCI now belongs in the conversation as the fourth hyperscaler alongside AWS, Microsoft Azure, and Google Cloud - progress made over the last two to three years. Apply the valuations given to those other hyperscalers to Oracle's cloud and the stock would be valued higher.
That still leaves out Oracle's (ORCL) enterprise business and suite, its work around Cerner - arguably the world's second-largest electronic patient record company - and its lock on data through its database. These are wide moats. I am strongly bullish on Oracle; the industry looks for bad news, but the fundamentals give plenty of reason to be positive.
