“Analysts Raise Meta Stock Price Predictions Prior to Q3 Earnings Announcement”

Meta’s AI-focused advertising approach

Meta Platforms has intensified its commitment to AI to enhance its advertising operations, a strategy that is already yielding positive results. The company’s AI platform, Meta AI, aims to assist advertisers in generating content with greater efficiency, and its popularity is on the rise. In September alone, more than 1 million advertisers took advantage of Meta’s generative AI advertising tools, creating 15 million ads and achieving a 7.6% boost in conversion rates. This degree of automation is revolutionary for businesses aiming to maximise their advertising budgets, particularly in fiercely competitive markets like Australia.

During the earnings call in July, Meta’s CFO, Susan Li, emphasized the company’s commitment to AI, stating, “We’re leveraging AI to provide increased automation for advertisers.” This transition towards AI-enabled advertising is anticipated to drive Meta’s growth forward, especially as businesses seek more precise targeting capabilities and improved returns on their marketing investments.

Nonetheless, there is skepticism regarding AI’s ability to completely supplant human creativity in advertising. Forrester Research Director Mike Proulx warned that while AI can enhance operational efficiency, it is improbable that Chief Marketing Officers (CMOs) will entirely delegate their responsibilities to AI in the near future. “Let’s be clear that it’s a ways off, if ever, before CMOs will simply hand over the keys to an AI agent that will autonomously generate ad creative on their behalf,” Proulx commented following Meta’s Q2 earnings report.

In spite of these concerns, Meta’s advertising revenue continues to be the main source of the company’s earnings, contributing over 98% of total revenue. With AI increasingly taking a central role, the company is in a strong position to sustain its leadership in the digital advertising arena, both globally and in regions like Australia, where businesses are eager to embrace innovative technologies to remain competitive.

Analyst forecasts and stock performance

Meta’s stock performance has been remarkably strong, with analysts raising their price targets ahead of the company’s Q3 earnings announcement. UBS has recently increased its price target for Meta Platforms to 0 from 5, sustaining a buy recommendation. The firm pointed to a rebound in brand advertising and improved consumer sentiment as the primary factors driving this upward adjustment. Additionally, political expenditures and optimized ad strategies have contributed to the boost in advertising budgets during August and September, according to UBS’s research note.

Guggenheim also raised its price target, adjusting it to 5 from 0 while maintaining a buy rating. The firm anticipates that investor attention will shift towards Meta’s Q4 revenue forecast driven by advertising, which is projected to reach billion, exceeding the .2 billion consensus. Guggenheim analysts are also eager to receive guidance on expenses and capital expenditures for 2025, along with more details regarding the returns on Meta’s AI projects. The firm’s channel checks and industry data indicate that Meta continues to be the preferred choice for additional advertising dollars, a trend that is expected to persist into the coming quarter.

In August, Barclays also elevated its price target for Meta, increasing it to 0 from 0, while maintaining an overweight rating. The analyst remarked that Meta has demonstrated “the fastest progress of any company in digital advertising,” with minimal signs of revenue slowdown, even in light of challenging comparisons in the latter half of 2024. This resilience is especially remarkable considering the wider economic uncertainties affecting other technology leaders.

As of October 8, Meta Platforms was trading at 2.89 per share, reflecting a more than 70% increase year-to-date. This rise in stock price indicates growing investor confidence in Meta’s capacity to harness AI and retain its preeminence in the digital advertising field. For Australian investors, Meta’s robust performance and optimistic analyst projections make it an attractive choice, especially for those looking to benefit from the ongoing rebound in global advertising spending and the expanding role of AI in enhancing business efficiencies.