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.
