Meta Platforms Inc (NASDAQ:FB) closed at a 28-month high on the Nasdaq this Wednesday following a 365-basis-point rally.
Analysts have started to reassess the stock in the age of artificial intelligence (AI), even as the Facebook and Instagram owner faces criticisms of disseminating potentially harmful content to minors.
New Mexico Attorney General Raúl Torrez has accused the social media titan of enabling adults to “find, message and groom minors” for sexual exploitation, while Walmart and online dating conglomerate Match warned of illegal content being placed next to their material.
Yet new opportunities presented by AI have been a major boost to Meta, while Mizoho analyst James Lee praised a rebound in advertising spend from major e-commerce firms like Temu and Shein.
“With new ad products and AI to automate customer service, we believe that the messaging platform could achieve the company’s international ARPU (average revenue per user) of $20 and increase the company’s revenue base by 30%,” Lee wrote.
Citi analysts also chose Meta as a top pick in its US internet coverage.
“Engagement continues to ramp with Reels driving meaningful social interaction (MSI) across the platform and we believe Meta is on a multi-year product roadmap across social tools (Reels, Threads, and Social Commerce, as examples), Generative AI (Llama 2, AI Studio, and verticalised LLMs), and advertising tools (Advantage+, Lattice, C2M, AI Sandbox, and Sponsored Reels, among others),” wrote Citi.
Meta shares were priced at $370.47 at the time of writing.