Meta Platforms Inc. has already translated artificial intelligence into revenue benefits, and one analyst thinks a continuation of that trend could power its stock further.
While other companies talk up their potential to capitalize on AI, Meta
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has already racked up tangible results from its efforts, according to Oppenheimer’s Jason Helfstein. Thanks to initiatives like AI-driven recommendations and AI-powered tools for advertisers, Meta has seen “revenue outperformance” relative to its peers, Helfstein noted. He expected Meta will stay an outperformer through 2024.
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Helstein boosted his price target on Meta’s stock to $350 from $285 in a Sunday note to clients, with his new target implying a 27% upside from current levels. He acknowledged that Meta shares have run up about 125% so far this year but still rated them at outperform and called them “highly attractive,” noting that they were trading at a roughly 30% discount to the Nasdaq on the basis of 2024 price-to-earnings estimates, as of the publication of his note.
The discount suggests Wall Street is skittish about Meta’s ability to achieve revenue expectations this year and next, in Helfstein’s view, or that investors are concerned about “terminal growth.” AI “solves” for that, he wrote.
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Helfstein was upbeat about new AI initiatives for Meta, including work to incorporate AI into click-to-message ads and chatbots, which would let smaller businesses automate customer-service chats. As Meta expands into e-commerce marketplaces and customer support for small- and medium-sized businesses (SMBs), it could tap into a $1.2 trillion market.
“We believe the industry is working toward generating synthetic video ads for SMBs, made using AI and edited on a per-user basis to increase ROI,” or return on investment, he continued.
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Meta shares are ahead about 1% in Monday morning action and the name is on track to finish with a market capitalization above $700 billion for the first time since Feb. 2, 2022, according to Dow Jones Market Data.
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