Meta's AI Goldmine: Why META Stock Could Soar to $600 ...
Meta Platforms (NASDAQ: META) isn’t cheap, by any means, but Meta Platforms stock will almost certainly continue its epic rally as the company effectively deploys AI across its social media platforms. Investors weren’t thrilled when CEO Mark Zuckerberg shifted the company’s focus to the metaverse. Yet, it looks like Zuckerberg is re-shifting Meta Platforms toward AI and investors are grateful for that.
The Power of AI Investment
There’s an old saying that you’ve got to spend money to make money. This appears to be the case with Meta Platforms, which frustrated some investors earlier this year because the company is spending a lot of money on AI technology. Zuckerberg defended this, stating, “Historically, investing to build these new scale experiences in our apps has been a very good long-term investment for us and for investors who have stuck with us.”
Months later, it appears that Zuckerberg had the right idea. Meta Platforms is deploying AI in meaningful ways. As Barron’s pointed out, “AI is recommending a rising percentage of posts on Facebook and Instagram, and telling advertisers which content creators might be good fits for their brands.”
AI-Enhanced Advertisements
Consequently, Meta Platforms is now able to raise its prices for AI-enhanced advertisements. KeyBanc analyst Justin Patterson observed a “meaningful uptick in Meta ad prices.” Moreover, he believes that this “reflects ongoing progress with AI across engagement, ad relevance, and advertiser returns.” According to Meta Platforms (via Marketing Dive), an “advertiser’s return on ad spend on its platforms is $3.71 in revenue for every dollar spent on advertising.”
The Future of META Stock
When ad campaigns are enhanced with Meta Platforms’ AI-powered Advantage+ Shopping platform, the ROAS increased to “$4.52 in revenue for every dollar spent on advertising.” Patterson noted that the “demand for Meta Platforms’ advertisements remains very high.”
Therefore, even if Meta Platforms stock already rallied this year, it can and probably will continue to head higher. While Patterson sees the stock price reaching $540, Meta Platforms is a high-tech high achiever that’s effectively deploying AI in its advertising platforms. So, feel free to add some Meta shares to your portfolio today, with a price objective of at least $600.
