Meta's AI Advancements Poised to Boost Stock Value, Says BofA

Meta's next AI wave? BofA says stock ready to soar on new features By Investing.com

On Monday, BofA Securities upheld a Buy rating for Meta Platforms Inc. (NASDAQ: NASDAQ:META) stock, with a consistent price target of $563.00. The firm anticipates that Meta may launch enhanced AI chat options, including advanced voice modes and celebrity voice integrations, which could be implemented across all of Meta's applications. The expectation extends to new AI capabilities for WhatsApp and Messenger that might feature a sneak peek at customer service bots and ecommerce integrations. The financial institution also foresees Meta capitalizing on an upcoming developer event to provide updates on Llama, its growing open-source language model. The event is expected to demonstrate Meta's progress in AI and how it's integrating these advancements to boost user engagement on platforms such as Facebook and Instagram. Although new usage data may not be disclosed, product demonstrations could showcase the impact of AI integrations. Additionally, there is speculation about the possibility of Meta announcing a new AI subscription service. However, this remains uncertain as the firm indicated it is only a small chance. The potential introduction of new AI features and services underscores Meta's continued investment in artificial intelligence to enhance user experience and functionality across its suite of applications. The focus on AI integration and development highlights Meta's strategy to remain at the forefront of technological advances in social media and messaging services. The company's efforts to integrate AI more deeply into its platforms could potentially lead to increased user engagement and open up new revenue streams through innovative services and offerings. In other recent news, tech giants including Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL), and Meta have been actively engaged with the European Union regarding the upcoming enforcement of the AI Act. These companies are partaking in the drafting of the codes of practice for the new legislation, with the finalized code expected to be in place by late next year. In another development, Google has purchased 50,000 metric tons of nature-based carbon removal credits from Brazilian startup Mombak, marking its first carbon project within Brazil. This follows a similar step by Microsoft (NASDAQ:MSFT), which also entered into an agreement with Mombak last year. On the other hand, Meta Platforms Inc. has secured up to 3.9 million carbon offset credits in a deal with BTG (LON:BTG) Pactual's forestry arm, as part of its strategy to achieve net-zero emissions by 2030. This purchase represents Meta's most substantial carbon removal procurement from a single project to date. Furthermore, Teresa Ribera, Spain's Minister for Ecological Transition, has been nominated to become Europe's new antitrust chief, a role that will be crucial in ensuring that tech giants adhere to the Digital Markets Act. These are among the recent developments involving these major technology companies. As Meta Platforms Inc. (NASDAQ: META) continues to push the boundaries of AI integration in its suite of applications, investors and analysts are keeping a close eye on the company's financial health and market performance. According to the latest data from InvestingPro, Meta boasts a robust market capitalization of $1.42 trillion, reflecting its significant presence in the tech industry. The company's commitment to innovation is also evident in its impressive gross profit margin, which stands at 81.49% for the last twelve months as of Q2 2024. This indicates Meta's ability to maintain profitability while investing heavily in new technologies like AI. InvestingPro Tips reveal additional strengths, such as Meta's perfect Piotroski Score of 9, suggesting strong financial health, and the fact that it holds more cash than debt on its balance sheet, providing flexibility for future investments and growth initiatives. These insights, combined with a P/E ratio of 27.96, which is relatively low compared to near-term earnings growth, paint a picture of a company that is not only a prominent player in the Interactive Media & Services industry but also one that is financially prepared to continue its AI-driven endeavors. For individuals looking to delve deeper into Meta's financials and market potential, InvestingPro offers a total of 16 tips, providing a comprehensive analysis of the company's performance and potential investment opportunities. With its next earnings date set for October 23, 2024, and a fair value estimation by analysts at $575, Meta's strategic focus on AI could very well translate into continued market success and shareholder value.

Analyst revisits Meta stock price target as Facebook parent ramps AI spend

Meta Platforms shares moved higher in early Monday trading after a top Wall Street analyst boosted his price target on the stock amid the Facebook and Instagram parent's AI-investment drive. Meta (META) shares, which hit a record high earlier in the session, have been one of the standout performers of the so-called Magnificent 7 stocks this year, adding around $510 billion in market value. The stock has also risen nearly 20% since the company's second-quarter earnings update in late July, when it posted a 22% surge in overall revenue and forecast September-quarter sales in the region of $38.5 billion to $41 billion. That growth rate helped cushion the impact of its capital-spending plans, most of it tied to AI investments, which is likely to rise to between $37 billion and $40 billion for the whole of 2024. Ad revenue across its family of apps division, including Facebook, Instagram and WhatsApp, rose 22% to $38.3 billion, with ad impressions up 10% from the same period last year. The group also launched a full-screen video player and a unified video recommendation system designed to further boost engagement times and expand ad inventories. Meta's AI-investment return Citigroup analyst Ronald Josey, who added $65 to his Meta price target, taking it to $645, in a note published Monday, says the investments, as well as the broader strength in the global ad market, will support the group over the final months of the year and beyond. Related: Analysts adjust Meta stock price target after earnings The analyst cited an increased ad load and overall usage rate for its Reels short-form-video offering, which Meta finance chief Susan Li said would "continue to drive growth" for Instagram. "Meta's discovery engine and content recommendation models, powered in part by its investments in generative artificial intelligence, provide a competitive advantage and represent a clear path for large language models' return on investment," said Josey. "We believe Meta's competitive advantage is now 'deeper and wider' due to improved engagement, investments in generative AI, and multiple newer offerings," adding that Meta is the investment bank's "top pick across the internet sector." More AI Stocks: Meta is slated to post its third quarter earnings update on October 23, with early indications suggesting a bottom line of $5.21 per share on revenues of $39.33 billion. Meta shares were marked 0.4% higher in early afternoon trading to change hands at $563.46, move that would extend the stock's 2024 gain to around 62.7% with a market value of $1.43 trillion. The stock hit an all-time high of $573.98 each earlier in the session. Related: Veteran fund manager sees world of pain coming for stocks