The company began to feel its impact in its 2021 Q3, but management revealed the full scope of its effect in Q4. “Multi-year AI driven platform retention could help multiple expansion, as terminal value uncertainty has weighed on valuation.” Reels currently monetizes at a slower pace than older and more established products like the news feed and Stories. According to Citi, the total addressable market for the metaverse could be $8trn-$13trn by 2030, while the number of users could rise to five billion, or 65% of the global population. The time could finally be right for Meta to capitalize on some of these new markets, and the stock looks affordable even without an impact from products like the Quest 3. BofA Securities said the event provided an initial glimpse into Meta’s strategy for leveraging AI to enhance user engagement through chat, image creation, and introducing new business services.
- “There are 1 billion or 2 billion people who have glasses today. I think in the future, they’re all going to be smart glasses,” essentially wearable computers, Zuckerberg predicted on the Q2 earnings call.
- The massive IPO valuation earned Facebook a spot in the S&P 500 in the first year of its public life.
- Meta Platforms has an excellent business, and with its investment in the metaverse, the potential for revenue growth long into the next decade.
- According to the majority of Wall Street analysts’ forecasts compiled by MarketBeat as of 2 November 2022, Meta Platforms stock could be a buy at current levels.
That can be harder to discern from a billboard, radio, or newspaper placement. A big part of Meta’s turnaround story involves overcoming the industry upheaval caused by Apple’s privacy change. Starting with the iOS 14.5 update in the spring of 2021, Apple began requiring apps downloaded through the App Store to let users opt in or out of tracking their activity across third-party sites.
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In the U.S., 202 million people used Facebook on a daily basis, up from 200 million in Q1. Beyond virtual reality, the Quest 3 also lets users “interact with virtual content and the physical world simultaneously,” offering a “mixed reality” experience. pty stock dividend That could mean playing a virtual game on your kitchen table or visualizing virtual art on your living room walls. Meta said its Quest 3 virtual-reality headset, which is 40% thinner than its predecessor, will go on sale on Oct. 10.
- The new name describes the metaverse and refers to the seamless social interaction provided by Meta’s social media application universe.
- Though it is not a massive increase in the company’s stock price, beating the market average, especially after its dismal 2022, is important for Meta.
- Mark Zuckerberg’s company recorded its biggest daily market gain in nearly a decade, as the mood brightens among tech investors.
- Meta’s relative strength line has been trending higher for several weeks and just eclipsed July’s 52-week high.
- Even if top-line growth slows for a few years as Meta builds up Reality Labs, the company’s share buybacks could help generate solid earnings growth for investors.
On the other hand, some investors are worried about the resources in time and capital that Meta Platforms could allocate to the project with uncertain outcomes. Nevertheless, the company’s core social media business is experiencing robust user and revenue growth at a massive scale. Let’s try to grasp Meta Platforms’ business better and determine whether it’s a buy, sell, or hold for 2022. The real excitement hasn’t focused primarily on the newest flashy tech. Wall Street is mainly fired up because the Menlo Park, Calif.-based social media giant has restored confidence in its digital advertising prowess and revenue growth appears to be back in high gear.
Still, the big surprise was Meta’s announced update of its Ray-Ban smart glasses, built in partnership with EssilorLuxottica (ESLOY). If inflation continues to persist at elevated levels, the Federal Reserve will continue to raise the federal funds rate. And investors have been concerned that aggressive moves by the Fed to push down inflation could end up severely hurting the economy. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer.
“With better monetization, additional room for cost efficiency, and increased scrutiny of TikTok, we continue to like the setup for FY23,” wrote the analysts, who recommend buying the stock. For the most part, investors have been jumping on Meta’s cost-cutting story and two rounds of job reductions, which began in November and are continuing in the first half 2023. In February, CEO Mark Zuckerberg said this would be the company’s “year of efficiency,” a declaration that sent the stock up over 20%.
More than 238,000 global tech workers have been laid off so far this year
The company has highlighted that it will be investing aggressively to become a leader in the metaverse. Meta alluded to some of these headwinds when it told investors that it expected a 7% growth in revenue for 2022. That would be the lowest rate of growth in the last decade and the first below double digits. Be sure to read IBD’s The Big Picture every day to stay in sync with the market direction and what it means for your trading decisions. Meanwhile, an important part of the Meta growth story is the ongoing shift to digital advertising.
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Upgrade to MarketBeat All Access to add more stocks to your watchlist. Investors will need to consider all of the risks and advantages before they start buying shares. Meta opened on January 5th down roughly 2% amidst news of yet another $414 million fine handed down for violating European Union law. Another reason Wealth by Virtue could be reports of layoffs at TikTok owner ByteDance. TikTok is a rising power in the world of social media, so any bad news for TikTok is good news for companies like Meta and Twitter. Part of it may be the realization of the savings CEO Mark Zuckerberg was looking for when Meta announced layoffs in November.
At the time, the company said it expects year-over-year losses to rise in 2023 and to grow “meaningfully” again in 2024. The new version will be able to livestream video to Facebook or Instagram from the perspective of the wearer. The glasses will also come with an AI assistant that can answer questions on the fly. But that capability will become much more interesting next year when Zuckerberg said a free software update will enable the AI assistant to see what you’re seeing. The Quest 3 will compete with Apple’s (AAPL) Vision Pro, set for release in early 2024, though at a much lower price point. Meta stock has rallied 149% so far in 2023 through Friday’s close, second only to Nvidia (NVDA) in the S&P 500.
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Generative AI operating costs are much higher than regular search. Shares of META are up more than 100% over the last year, and the stock has captured the attention of retail investors, frequently appearing on the Yahoo! Finance trending tickers list. Analysts and investors are buzzing about the company’s upcoming Meta Connect 2023 event on Sept. 27 and Sept. 28. The event will be held virtually and focused on AI and virtual, mixed and augmented realities.
That could very well signal that Meta’s advertising business, which makes up the vast majority of its revenue, reached a nadir in the fourth quarter as well. Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. Meta is clearly facing headwinds and it will be a challenge to overcome them, but the relative bargain valuation suggests these headwinds are already priced into the stock. That makes the potential reward Meta can generate going forward worth the risk.
Meta Platforms (META) News Today
To put that figure into context, Meta’s revenue in 2021 was $118 billion (about 15.5%). Interestingly, marketers are increasing their spending on digital channels. Since folks spend more time on their phones, connected TVs, and laptops, marketers are moving their spending to where consumers are.
Finally, rising competition from ByteDance’s Tiktok and other social media sites is slowing user growth and engagement. Those worries, in part, have resulted in Meta’s share price plummeting 50% over the past 12 months. But shares are rebounding today as some investors appear to be coming back to the technology sector. 52 Euraud correlation Wall Street research analysts have issued “buy,” “hold,” and “sell” ratings for Meta Platforms in the last year. There are currently 2 sell ratings, 5 hold ratings, 44 buy ratings and 1 strong buy rating for the stock. The consensus among Wall Street research analysts is that investors should “moderate buy” META shares.