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Meta’s layout of AI advertising has achieved good results, analysts: the stock price will rise by another 29%

ChatGPT, an artificial intelligence (AI) chatbot developed by OpenAI, shocked the world overnight after its open beta test, making the AI ​​theme immediately attract investors’ frantic pursuit, and related stocks became the focus of pursuit. Among them, Meta, which has been deploying AI for a long time, has been praised by Wall Street analysts, who are optimistic that the stock price will rise by 29%. The reason is that Meta’s heavy investment in AI will be the most important catalyst for stock prices.

Barron’s” reported that American investment bank Oppenheimer analyst Jason Helfstein issued a research report, raising Meta’s target price for the next 12 months from $220 to $235, which is still 29% upside from the closing price of $181.69 on March 9. Helfstein maintained his “Outperform” rating on Meta and cited several short-term catalysts that could help drive up Meta’s stock price.

According to a FactSet survey, 46 analysts who rated Meta gave an average target price of $206.89, the highest average target price since September 2022.

Helfstein wrote in the report: “Because AI investment makes Meta advertising more accurate and increases the valuation of Meta advertising business, the target price is raised to $235.” Helfstein put Meta’s 2023 and 2024 advertising revenue forecasts on top Revised 2%, and said Meta’s earnings before tax, depreciation and amortization (EBITDA) will increase by 4%.

When Meta held a financial report video conference in February, it stated that AI investment has begun to become the growth engine of the advertising business.

Meta CEO Mark Zuckerberg mentioned at the time: “We will continue to invest in AI, and we are gradually seeing results. Last quarter, the conversion rate of advertisers was more than 20% higher than the same period last year, and the cost per action (cost per acquisition) has also declined, giving advertisers a higher return on their ad spend.”

In addition, Helfstein pointed out that Meta has recently launched a new wave of layoffs, which will help reduce the company’s costs and have a better chance of making money in the future. Foreign media recently reported that after Meta’s first large-scale layoff of 11,000 people (accounting for 13% of manpower) in November 2022, it will take action again this week, and may lay off thousands more people.

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