New Street Research analyst, Dan Salmon, has made a bullish move by upgrading shares of Meta Platforms Inc. just ahead of the company's earnings report. Salmon's confidence in the stock, trading as META, +0.45%, stems from optimistic feedback received from digital-advertising executives. This feedback indicates that positive results are more likely than negative ones.
According to Salmon, the ongoing popularity of Meta's Reels feature, as well as the increasing adoption of the Advantage suite of ad products (particularly Advantage+ shopping campaigns), will drive outperformance in the digital advertising market in the near future. The Advantage+ offerings leverage machine learning to simplify the campaign-building process for marketers, reducing manual work.
Salmon clarifies that his decision to upgrade Meta shares from neutral to buy is not solely based on this fiscal quarter's performance but is driven by his growing confidence in Meta's potential within the field of artificial intelligence.
Meta's AI Efforts Receive Positive Feedback
Meta, formerly known as Facebook, has received "very positive feedback on the company's AI efforts" during a recent event featuring AI speakers. This exchange of ideas has greatly influenced the company's outlook, especially regarding the potential monetization of WhatsApp and Messenger through a subscription-based generative AI agent for business clientele.
Generative AI and the Metaverse
Surprisingly, Meta's AI endeavors also extend to the metaverse, an area where there is some skepticism on Wall Street. However, Salmon, an industry expert, believes that generative AI can play a pivotal role in enhancing efficiency within the metaverse.
Introducing Llama 2: An Open-Source Language Model
Continuing its commitment to openness and innovation, Meta recently unveiled Llama 2, an open-source large language model. By collaborating with Microsoft Corp., Meta aims to significantly expand the applications of its language model in various domains.
Positive Outlook for Meta Shares
In light of these recent developments, Salmon has raised his price target for Meta shares from $285 to $350. This upward adjustment reflects his confidence in Meta's growth potential.
Currently, Meta shares are experiencing a 0.5% increase in morning trading and have already soared over 140% this year.