Meta Bets Big on AI Rebound, Alphabet Retreats, SpaceX Takes High-Risk Frontier Stance
Three tech giants - Meta Platforms, Alphabet, and SpaceX - are navigating different facets of the frontier model, an AI architecture that promises to revolutionize industries. Each company is playing a unique game, with varying levels of success.
META's Llama 4 was panned by critics, but management's response was swift, investing $14.3B in Scale AI and rebuilding their architecture from scratch. The new model, Muse Spark, launched in April 2026, triggering a single-session +7% rally worth over $100B in market cap.
However, the cost of this ambition is evident: CapEx intensity has surged to 34.7% of revenue in 2025, and management has yet to outline their 2027 capex roadmap. Evercore ISI cut its price target to $820 but maintained an Outperform rating, citing investor frustration at the 'silence on frontier-model competitiveness.'
Alphabet, on the other hand, is deliberately pivoting away from pure frontier model leadership. Goldman Sachs noted management restructuring that shifts DeepMind Chairman Demis Hassabis toward AGI research while Koray Kavukcuoglu takes operational control of Gemini commercialization.
Despite this, Google Cloud grew 63% YoY with a contracted backlog of $460B, and Gemini 4 training has already begun. Goldman's 12-month target of $435 implies ~22% upside from today's $355.21.