Meta’s spending has long been a focus for investors. The stock sold off by a record 64% in 2022 as CEO Mark Zuckerberg failed to justify funneling billions of dollars into building out the metaverse, a virtual world that failed to catch on with users.

On a day US tech stocks lost nearly $1 trillion on concerns about artificial intelligence spending, Meta Platforms Inc. hit a record high — signaling that investors were keeping the faith when it came to its own AI plans.

The Facebook parent saw its stock undeterred by the perceived challenge posed by Chinese startup DeepSeek — whose AI model is open sourced, like Meta’s Llama. Meta’s recent strength stands in contrast to Microsoft Corp., which has seen its shares falter on concerns about heavy AI spending — including its stake in OpenAI, a key competitor to DeepSeek.

Both companies report on Wednesday, and the return they’re getting from AI will be a key theme.

“Meta is in a better long-term position with AI than Microsoft, and the success of DeepSeek validates its open-source strategy,” said Gene Munster, co-founder and managing partner at Deepwater Asset Management. Llama could become “the DeepSeek of the West” as U.S. companies are unlikely to build off a China-based model, he added.

According to Munster, investors have welcomed Meta’s spend because of the potential for AI to improve its engagement and advertising. In comparison “Microsoft’s AI road has become less clear over the past several months, and the impact will be a lot less immediate,” he said.