What happened
LivePerson(NASDAQ: LPSN) stock is losing ground in this week's trading. The company's share price was down 9.9% from last week's market close before the market opened this Friday, according to data from S&P Global Market Intelligence.
In addition to investor concerns that the Federal Reserve will raise interest rates again this year, LivePerson is seeing its stock pressured by emerging competitors. Meta Platforms(NASDAQ: META) is making a bigger play in the chatbot technologies space, and it could threaten the automated customer-service specialist.
So what
On Wednesday, Meta Platforms announced that it was rolling out new chatbots and generative artificial intelligence (AI) development tools. The new offerings see the tech giant encroaching further on LivePerson's turf and threatening the smaller company's growth outlook.
Meta has already rolled out a soft launch for its new lineup of 28 AI-powered chatbots. The bots are tailored after the personalities of celebrities including Kendall Jenner, Tom Brady, and Snoop Dogg. While this offering doesn't directly threaten LivePerson, it looks more concerning when viewed in conjunction with other initiatives.
Along with its new, personality-driven chatbots, Meta also announced that it would rolling out tools that allow developers to build bots for use across its platforms. The company has previously highlighted integrating customer service chatbots into WhatsApp as a way to better monetize the messaging service, and it appears to be making some big moves along those lines.
Now what
Data gathered from users interacting with Meta's personality chatbots will be valuable when it comes to training generative AI systems for customer service. This development could pose a significant threat to LivePerson's long-term viability. WhatsApp alone has more than 2 billion users, and Meta has other resource advantages that LivePerson and other smaller players in the chatbot space will be unable to match.
Even with the influx of new competition seemingly in relatively early stages, LivePerson has been posting unimpressive business performance lately. The company's revenue fell 26.4% year over year to land at $97.5 million, and its ability to shift into delivering consistent profits is questionable. Some of the sales declines have stemmed from divestitures and corporate restructuring, but it looks like the business is in danger of continuing to lose ground over the long term.
10 stocks we like better than LivePerson
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and LivePerson wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of September 25, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool recommends LivePerson. The Motley Fool has a disclosure policy.
