Meta (the parent company of Facebook) has seen strong stock price performance recently, ranking second only to Nvidia among the "Big Seven". Its stock price rose largely as Wall Street analysts raised their price targets and benefited from strong second-quarter earnings and huge investments in artificial intelligence. The editor of Downcodes will give you an in-depth understanding of the reasons behind Meta's recent surge in stock price, as well as future development trends.
In this year's stock market, Meta, as the parent company of Facebook, performed quite eye-catching, especially among the so-called "Big Seven" stocks. In addition to Nvidia, Meta's performance was particularly outstanding.
Recently, Meta's stock price continued to rise in Monday's trading, largely as one of Wall Street's top analysts raised his price target on the stock.
Shares of Meta (ticker: META) hit a new high in today's trading, and the overall market has performed well, adding about $510 billion to its market value so far this year. The stock is up nearly 20% since the company reported second-quarter earnings in late July.
The report mentioned that Meta's overall revenue surged by 22% and it expected sales in September to be between US$38.5 billion and US$41 billion. Such growth makes the company more comfortable when it comes to capital expenditures, especially investment in AI.
It is predicted that Meta's AI investment in 2024 will reach US$37 billion to US$40 billion, which will have a significant impact on platforms such as Instagram, with significant growth in user engagement time and ad display volume. Meta’s advertising revenue, including total revenue from apps including Facebook, Instagram and WhatsApp, reached $38.3 billion, a year-on-year increase of 22%.
At the same time, the number of ad impressions increased by 10% compared with the same period last year. To further increase user engagement and expand advertising resources, Meta also launched a full-screen video player and a unified video recommendation system.
On the analyst side, Citigroup analyst Ronald Josey raised his price target on Meta's stock by $65, with the new target price set at $645. He believes Meta's investment, along with the overall strong performance of the global advertising market, will continue to support the company's growth in the coming months. He also mentioned that the increase in usage and advertising volume of Meta’s short video product Reels will continue to promote the development of Instagram.
“Meta’s discovery engine and content recommendation model, driven in part by their investments in generative artificial intelligence, give the company a competitive advantage,” Horsey said. According to him, Meta’s competitive advantages are now “deeper and broader,” making them one of the best investments in the Internet industry.
It is worth mentioning that Meta will release its third-quarter financial report on October 23, with preliminary forecast earnings of $5.21 per share and expected revenue of $39.33 billion. Currently, Meta's stock price rose 0.4% in early trading, reaching $563.46. This increase has brought the stock's overall growth in 2024 to approximately 62.7%, and its market value has also risen to $1.43 trillion.
Highlight:
Meta stock has performed well, adding $510 billion to its market value this year.
? AI investment is expected to reach US$37 billion to US$40 billion in 2024, driving advertising revenue growth.
? Citi analysts raised the target price of Meta stock to $645, believing that its competitive advantage has deepened.
All in all, Meta's strong growth is driven by its strategic investments in artificial intelligence and the continued growth of its advertising business. In the future, with the further development and application of artificial intelligence technology, Meta's stock price performance is worth looking forward to. However, investment is risky and you need to be cautious when entering the market.