Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB)’s increasing adoption of artificial intelligence should drive shares and revenue higher over the coming years, Oppenheimer analysts suggest.
Following a 2% and 3% beat to revenue expectations over the third and fourth quarters respectively, the bank lifted Meta’s share price target to US$585 from US$525.
First quarter revenue was estimated to come in at just over US$37 billion, against a previously anticipated US$35.9 billion, which would mark a 29% year-on-year climb.
This is as Meta looks to capitalise on the likes of AI-powered video recommendations, AI messaging tools for businesses and AI-based assistants, Oppenheimer said.
Coupled with stubborn advertising demand, improvements to tools such as Meta’s Advantage+ platform should continue driving upside, the bank continued.
“We think Meta will eventually use Advantage+ and similar tools to generate entirely new ad copy, further streamlining the advertising process for advertisers with limited budget.”
Oppenheimer also pointed to Meta’s plans to invest heavily in, and stockpile, NVIDIA H100 GPUs, which suggest a firm commitment to keep developing AI tools.
That said, Oppenheimer noted Meta would need to stem losses in its virtual reality research wing to be re-rated higher still, with an ‘Outperform’ rating reiterated
Shares dipped 0.15% to US$526.57 on Monday.