If you’re going to be part of the Magnificent Seven, you better do something that’s, well… magnificent. That’s what Meta is hoping with its latest acquisition. This acquisition could bolster its position among its Mag Seven peers who are all competing for AI dominance.
AI has been the obvious market mover with news like Google’s acquisition of Wiz and Amazon meshing generative AI its much-ballyhooed revenue generator Amazon Web Services (AWS). Apple has been making waves with its intelligence feature that it’s incorporating in its iPhones. All this may have had Meta feeling left out in the cold. Not anymore. Meta decided to invest $15 billion to acquire almost half of Scale AI. It was the social media giant’s version of a mic drop after listening to its Mag Seven peers tout their AI platforms.
Bolstering AI Human Capital
Scale AI might not sound immediately familiar. The 2016 startup has grown to become the top data labeling firm. Regarding AI operating at peak level, it needs this data labeling process to identify raw data such as images, text, and audio. Scale AI is able to keep costs at a minimum by hiring contract workers from around the globe. This is particularly involves emerging market countries like India, Venezuela, and the Philippines.
In addition to the acquisition of the company, Meta also hired its CEO and other top staffers. The move was made to bolster its AI human capital for its “superintelligence” unit.
“The deal was good news for Meta, which was widely seen as falling behind in the AI race and in need of new AI leadership,” Time Magazine said.
If Meta continues to bolster its AI and the stock responds positively, consider the Direxion Daily META Bull 2X Shares (METU ). Alternatively, if Meta’s stock price pushes lower in the interim, there’s the Direxion Daily META Bear 1X Shares (METD ) available to take the other side of the trade as a hedge.
Rising M&A Activity in AI
One of the reasons AI has been prospering is the amount of mergers and acquisitions (M&A) occurring in the burgeoning sector. M&A activity can provide an indicator of whether a certain sector is hot or not. M&A activity certainly dropped off in certain sectors, but not tech. Meta’s acquisition of Scale AI certainly speaks to that.
According to Yahoo Finance, M&A activity fell by 18% from January to June 17 based on Dealogic data. The positive story is that the value of deals is up 10% versus the same time last year. Again, thank tech for that increase, and more specifically, artificial intelligence.
“Anything that’s sheltered from tariffs in a shifting and evolving sector is where you’re going to see the activity right now, and AI is somewhere with that, where there is an absolute race,” said Lucinda Guthrie, head of data provider Mergermarket.
If any other big Mag Seven names haven’t satiated their appetites to acquire companies, consider using these single-stock ETFs to trade the news:
- Tesla: Direxion Daily TSLA Bull 2X Shares (TSLL )/Direxion Daily TSLA Bear 1X Shares (TSLS )
- Apple: Direxion Daily AAPL Bull 2X (AAPU )/Direxion Daily AAPL Bear 1X Shares (AAPD )
- Amazon: Direxion Daily AMZN Bull 2X Shares (AMZU ),Direxion Daily AMZN Bear 1X Shares (AMZD )
- Google: Direxion Daily GOOGL Bull 2X Shares (GGLL )/Direxion Daily GOOGL Bear 1X Shares (GGLS )
- Microsoft: Direxion Daily MSFT Bull 2X Shares (MSFU )/Direxion Daily MSFT Bear 1X Shares (MSFD )
- Nvidia: Direxion Daily NVDA Bull 2X Shares (NVDU )/Direxion Daily NVDA Bear 1X Shares (NVDD )
Trade Robotics With AI
AI might be garnering the most interest, but robotics also continues to be a hot topic amongst disruptive technology. A Yahoo Finance report noted the industry is poised for its own expansive growth. Estimates show the robotics market is set to grow from $71.78 billion in 2025 to $150.84 billion by 2030. This would equate to a 16.0% compound annual growth rate.
Traders who don’t want to assume the concentration risk of one stock can trade the whole robotics/AI trend. One potential play is the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF (UBOT ). While it’s not a pure AI play, it does include a familiar name in the AI space as its top holding (as of May 31): Nvidia. Rounding out the top three holdings is Keyence and Fanuc Corp., which might not ring a bell to casual investors, but they’re big names in the robotics space.
UBOT gives traders 200% of the daily performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index.
For more news, information, and analysis, visit the Leveraged & Inverse Channel.
