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A lot of companies talk up their artificial-intelligence opportunities, but Meta Platforms Inc. is one of just a “handful” that can see serious financial benefits, at least within the internet sector.
That’s the view of Wolfe Research analyst Deepak Mathivanan, who lifted his price target on Meta shares
META,
to $330 from $300 Tuesday while writing that Wall Street doesn’t give the Facebook parent company enough credit for its potential to cash in on the AI revolution.
Meta can use AI to “drive incremental image/video creation” and get users to spend more time on apps like Facebook and Instagram, according to Mathivanan. And the company also has compelling potential as it uses AI to augment chat assistants within WhatsApp and on Messenger.
Read: Meta’s stock deemed a high-conviction buy at Citi, as strategy remains ‘underappreciated’
“Incremental revenues from new engagement and ad inventory is the most direct benefit,” Mathivanan wrote, but generative AI should also “meaningfully” help Meta’s advertising products and bring rates higher over time.
In his view, “few companies possess ALL the building blocks required to create and deploy Gen AI experiences that can be a significant driver of revenue and FCF [free-cash-flow] growth,” and Meta is one. The stock is a top pick at Wolfe Research.
There’s “plenty of runway for shares over the next six months,” he wrote, even as the stock, which he rates at outperform, has more than doubled so far this year.
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Piper Sandler’s Thomas Champion is also feeling incrementally upbeat about Meta’s AI prospects, upping his price target to $310 from $270 in a Wednesday report, while keeping an overweight rating.
The company’s AI strategy is threefold, by his assessment, as Meta can use AI to enhance user engagement, automate more advertising tasks, and sponsor an open AI ecosystem.
“With this strategy we believe that AI can help Meta re-gain lost share,” he wrote.
See also: European Commission says it may want to break up Google’s ad-tech business
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