Meta's Stock Soars on AI Innovations and Strong Financial Performance

Analysts update Meta stock price target with Q3 earnings in focus

Meta Platforms shares edged higher in early Wednesday trading, putting the Facebook parent within touching distance of a fresh all-time high, following a price target boosts from a two Wall Street analysts heading into the group's third quarter earnings later this month. Meta (META) shares, which have added nearly $600 billion in value so far this year, have been lifted by both the group's hammerlock in the social media ad market and its potential to capture more corporate spending, with higher margins, from the investments its making in AI-related technologies. Ad revenue across Meta's family of apps division, including Facebook, Instagram and WhatsApp, rose 22% to $38.3 billion over the three months ending in June, 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 over the coming year. The group also unveiled a new AI model last week, dubbed Movie Gen, that it says can create specialized audio and video clips based on user voice prompts. KeyBanc Capital Markets analyst Justin Patterson, who raised his price target on the group by $105 in a note published late Tuesday, taking it to $655 per share, thinks that strength is likely to support both third quarter earnings and the group's near-term outlook. "Our checks indicate that the ad market remained solid in Q3, and favorable currency movements suggest potential upside to Street revenue and profitability forecasts for Meta," Patterson said. AI investment spend "Additionally, we believe product cycles at Meta are likely to sustain solid growth into 2025," he added. "Big picture, we believe progress in Facebook Reality Labs and AI are causing more investors to look through operating losses and assign a higher P/E multiple to [Meta stock]." Last month, Meta unveiled the first version of its augmented-reality glasses at a tech event in California, as well as a new version of its Quest mixed-reality headset that has AI technologies built within it. The group also added AI chatbot capabilities to its Ray-Ban Meta smart glasses. Related: Analyst reset Meta stock price target ahead of Q3 earnings Wall Street is looking for Meta to post third quarter revenues in the region of $40.1 billion, nearly all of it coming from ad sales, and a bottom line of $5.22 per share. Investors will also focus on the first look into the the group's capital spending plans for 2025, much of it tied to AI investments, with the current-year target hovering between $37 billion and $40 billion. Revenue growth runway Cantor Fitzgerald analyst Deepak Mathivanan, who nudged his price target $10 higher, taking it to $670 per share in a note published Tuesday, thinks Meta is likely to reiterate its call for "significant growth" in spending, but revenue gains will also likely impress despite "lingering discomfort on ROIC of AI investments." Related: Analyst revisits Meta stock price target as Facebook parent ramps AI spend "We think Meta has plenty of runway in ongoing contributors (A+, Reels, recommendations) to revenue growth in FY25E (and) the impact of GenAI investments could increasingly emerge over the next 12-18 months," he said. "We expect the depth of engagement to improve as use cases expand and Meta merchandises Meta AI increasingly into various products and services." More AI Stocks: "Overall, we think Meta can sustain revenue growth above mid-teens in FY25E," he added. "This should set a clear path for $27-28 in FY25E EPS despite the increase in costs such as [depreciation and amortization]." Meta shares were last marked 0.15% higher in premarket trading to indicate an opening bell price of $593.78 each, a move that would extend the stock's six-month gain to around 15%. Related: The 10 best investing books, according to our stock market pros

Watch These Meta Platforms Price Levels as AI Optimism Boosts Stock to Record High

Investors should monitor key retracement levels around $535 and $480, while also monitoring chart-based bullish price targets at $700 and $790. Meta Platforms (META) shares hit another record high Friday as investors continue to pile into the stock, impressed by the tech giant's latest artificial intelligence (AI) and metaverse innovations revealed last week at the company's Connect conference. Earlier this week, the shares received a boost after Pivotal Research analyst Jeffrey Wlodarczak initiated coverage on the stock with a "buy" rating, pointing out that the Facebook and Instagram parent's AI initiatives have it well placed to boost user engagement, helping the company gain market share in search and social media. Meta shares were up 0.4% at around $585 in midday trading Friday. The stock has gained 65% so far in 2024, handily outpacing the S&P 500's return of around 20% over the same period. Looking ahead, investors should eye several key retracement levels on Meta's chart, while also monitoring a couple of bullish price targets we can forecast using technical analysis. During an initial pullback in the stock, it's worth keeping an eye on the $535 level, a key region on the chart near the ascending triangle top trendline that may have flip from providing prior resistance into offering future support. A breakdown below this level could signal a potential trend reversal, leading to a retest of lower support around $480, an area where the shares would likely attract buying interest near the rising 200-day moving average and a range of similar trading levels on the chart between February and August. Forecasting chart-based price targets essentially works by using historical price action to predict future moves. To project a price target using the measuring principle, we calculate the distance between the symmetrical triangle's two trendlines near the start of the pattern and add that amount to the breakout point. In this case, we add $165 to $535, which forecasts a target of $700. We can predict a price target using the bars pattern by taking Meta's trend higher from December to March and overlaying it on the chart from last month's low, a technique that forecasts a target of around $790. The prior move, which also started from the lower trendline of an earlier ascending triangle, occurred over 62 trading days, meaning a similar trending move could potentially play out until early December if price history rhymes. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

Meta Stock Soars To New 52-Week High As Billionaire Zuckerberg Surpasses Bezos: What's Driving The Surge? - Meta Platforms (NASDAQ:META)

Strong bullish signals indicate a promising future for Meta, driven by AI innovations and user engagement. Meta Platforms Inc. META is on fire, recently reaching a stunning 52-week high of $588.80 on Oct. 4, 2024. With a year-to-date surge of 68.65% and an impressive 91.12% gain over the past year, the stock is clearly basking in the bullish limelight. As Meta soars, its CEO Mark Zuckerberg is also riding high, surpassing Amazon.com Inc. AMZN founder Jeff Bezos to become the world's second-richest person, with a net worth of $206.2 billion. Talk about a double whammy! Read More: Mark Zuckerberg Bulldozes Past Jeff Bezos To Become World's 2nd Richest Person As Meta Stock Soars: Is Musk's Top Spot In Jeopardy? Meta Stock Chart Paints A Bullish Picture The technical indicators are solidly in Meta's corner. Chart created using Benzinga Pro Currently trading at around $585.01, the stock is well above its five-, 20- and 50-day exponential moving averages, signaling a strongly bullish trend. The eight-day simple moving average sits at $574.13, while the 20-day and 50-day SMAs are at $551.02 and $525.74, respectively. Even the 200-day SMA at $479.57 adds to this bullish narrative. Chart created using Benzinga Pro The Moving Average Convergence Divergence (MACD) indicator, registering a healthy 16.69, further supports this momentum. However, the Relative Strength Index (RSI) is perched at 75.72, suggesting that the stock may be overbought, which could invite a temporary pullback. AI Innovations Set The Stage For Growth As if the technical strengths weren't enough, Meta is also making headlines with its ambitious focus on artificial intelligence. With significant investments planned for 2024, the company aims to enhance user experience and refine ad targeting across its platforms. With soaring ad impressions and deepening user engagement, Meta is not just following the AI trend; it's among the leaders. This strategic focus positions Meta to dominate the digital advertising arena, promising an exciting future for investors. A Thrilling Ride Ahead With Zuckerberg's fortune on the rise and Meta's stock hitting new heights, the combination of strong technical indicators and innovative strategies paints a bright picture for the future. Investors should buckle up; the journey with Meta Platforms is sure to be exhilarating! Read Next: Telegram Joins X, Meta, LinkedIn In Privacy Dilemma: Social Media Faces Growing Government Control Photo: Shutterstock Market News and Data brought to you by Benzinga APIs