Metaplatforms (META) stock traded flat on Thursday, despite analysts’ positive view of the AI and Metaverse products announced by Facebook’s parent company at the Connect conference. Ta.
↑ X NOW PLAYING Blue chips and small caps are lagging in a mixed session. Focus on META, KBH, and ARM
Analysts were generally bullish after CEO Mark Zuckerberg’s keynote speech. But meta stock watchers are balancing excitement about AI and smart glasses with questions about how much they’ll cost.
This is especially true for its Metaverse-focused Reality Labs division, which posted an operating loss of more than $8 billion compared to $793 million in the first half of this year.
“Overall, this enhancement is exciting and adds to Meta’s existing ecosystem of hardware/software capabilities across the Metaverse,” CFRA analyst Angelo Gino said in a letter to customers late Wednesday. It’s built on that.” “Still, we expect segment losses to be between $15 billion and $20 billion this year, and there are doubts whether increased investment on the hardware side will recoup investor value over time,” Reality Labs said. I see no way for the department to make a profit.”
On the stock market today, Meta stock closed slightly lower at 567.84. The stock rose about 1% on Wednesday to close at 568.31, and at one point rose to an all-time high of 576.88.
Meta Stock becomes top AI choice for Jefferies
The first day of the Meta Connect developer conference featured previews of the low-cost Quest 3S virtual reality headset, new Celerity voices and other features for AI chatbots, and Meta’s Orion augmented reality glasses. Zuckerberg also revealed that the Meta AI chatbot now has over 500 million monthly active users.
“On the consumer side, we’re bullish on the incredible traction of meta-AI and the potential for new image, translation and voice capabilities to increase core engagement,” said Jefferies analyst Brent Till. “I’m finding out,” he wrote. “In the enterprise, we see Llama becoming a strong contender and gaining momentum with its new multimodal capabilities. Meta = one of our top picks for AI.”
This rates Meta stock as a buy.
Meta told investors in July that it would spend up to $40 billion in capital spending this year. Jefferies’ Mr Till acknowledged there could be a “lag” between these investments and the revenues associated with new products.
“Meta’s new products Llama and Meta.AI, in which Meta has invested heavily, have not yet been monetized,” Till wrote. “That said, we are confident in Meta’s proven ability to successfully scale and monetize new products (mobile, Reels, Stories, etc.) and Meta is able to do so using AI. I hope so.”
Will investors buy into the Metaverse vision?
Similarly, Oppenheimer analyst Jason Helfstein saw the focus of this year’s events as more interesting for the meta in the long term.
“In the short term, I don’t think we’ve had the same impact as we did last year with our focus on integrating AI into our core business and improving ROI for advertisers,” Helfstein wrote in a note to clients on Wednesday. “This year, CEO Zuckerberg has spent more time talking about his work with Ray-Ban and demoing fully holographic glasses.”
Metaverse has never been popular with investors. Reality Labs’ significant losses contributed to Meta’s severe underperformance in 2022.
Since then, the stock has made a convincing comeback due to the strength of Meta’s advertising business. But Reality Labs is still far from monetizing.
But William Blair analyst Ralph Schuckert said Meta’s Ray-Ban smart glasses are gaining traction.
“While we do not expect this to change investors’ perception of the company’s Metaverse vision overnight, we believe that incremental product enhancements appear to be helpful,” Schuckert said in a letter to clients Thursday. I believe that.” “Additionally, we believe the Orion prototype has provided us with a step-by-step approach to future use cases.”
Metastock: Expanded historical purchase zone
Thursday’s action leaves Meta stock near the top of a 5% buy range from the 542.81 consolidation pattern buy point identified by MarketSurge.
Meta stock has risen more than 60% this year. Among the Magnificent Seven stocks, NVIDIA is the only one to boast the best performance, and its gains are second only to NVIDIA.
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