Veteran fund manager revamps Facebook parent stock price target after conference
He came, he saw, he wore funky glasses..
Meta Platforms (META) CEO Mark Zuckerberg is said to be fascinated with the Roman Empire.
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He spent his honeymoon in Rome, and two of his children, August and Aurelia, are named after emperors Augustus and Marcus Aurelius, Reuters reported.
Zuckerberg kept that Roman vibe going during the annual Meta Connect 2024 event in Menlo Park, Calif., by wearing a custom T-shirt with the Latin phrase "aut Zuck aut nihil," or "all Zuck or all nothing."
The phrase was a play on "aut Caesar aut nihil," which means "either a Caesar or nothing," or more simply "all or nothing."
"It's been an exciting year, but it's been a very busy year," he said. "You know a lot of the stuff that we've been talking about for a long time ... it's happening and we can start to see how the future of computing and the future of human connection are going to look and it's pretty awesome."
Zuckerberg showed the first working prototype of augmented-reality glasses, called Orion, saying that "this is the physical world with holograms overlaid on it."
David Paul Morris/Bloomberg via Getty Images
Meta CEO: 'Orion is a time machine'
"For now, I think the right way to look at Orion is as a time machine," he said. "These glasses exist, they are awesome and they are a glimpse of a future that I think is going to be pretty exciting."
Orion AR glasses are not yet available for users and for now are mostly for internal testing.
Related: Analysts adjust Meta stock price target after earnings
Among other announcements, Meta’s AI assistant will now respond to voice commands and offer users the option to make the assistant sound like celebrities including Judi Dench, John Cena, Keegan-Michael Key, Kristen Bell and Awkwafina.
“I think that voice is going to be a way more natural way of interacting with AI than text,” Zuckerberg said.
The company has been plowing tens of billions of dollars into its investments in artificial intelligence, augmented reality and other metaverse technologies, driving its capital-expenditure forecast for 2024 to a record $37 billion to $40 billion.
Its metaverse unit, Reality Labs, lost $8.3 billion in the first half of this year, according to the most recent disclosures. It lost $16 billion last year.
Shares of Meta Platforms, parent of Facebook, Instagram and Whatsapp, closed at a record $576 on Sept. 25. The stock is up 61% year-to-date and has climbed 90% from a year ago.
Investment firms issue Meta research notes
Several investment firms issued research notes on Meta Platforms, including Bank of America Securities, which boosted its price target to $630 from $563 and reiterated a buy rating.
“We think AI glasses have much broader market potential than VR Googles,” the firm said. “While Metaverse spend still seems hard to justify, with glasses long-term investors may have some renewed optimism on Meta's opportunity to be at the forefront of the next generation of personal computing devices.”
More important, B of A said, “the company appears to be successfully innovating around new AI capabilities, driving usage growth which can offset terminal value concerns, and we see Meta as the top AI pick in consumer internet.”
Rosenblatt analyst Barton Crockett raised the firm's price target on Meta Platforms to $811 from $643 and kept a buy rating on the shares.
The Connect 24 conference highlighted how Meta is "uniquely delivering category products that could be described as leading in consumer adoption," the analyst said.
Crockett said the event also highlighted how Meta was continuing to advance its artificial intelligence capabilities.
The analyst said Meta's AI capabilities were part of a positive inflection in the company's core advertising business that is still not fully captured in the shares.
Meta's growth merits a higher multiple, said Crockett, who raised his Wall-Street-high price target, assuming Meta can trade in a year at an Apple-like multiple of 30 times forward earnings.
Wedbush analysts said the event featured new product announcements and updates spanning AR/VR hardware as well as consumer-facing AI applications.
The event also featured a glimpse of Orion, what it called a fully functioning prototype of AR smart glasses that blend AR and AI together on one device.
Fund manager: 'Meta has made meaningful progress on AI'
The investment firm says Meta is making encouraging progress along its AI product roadmap with Meta AI on track to become the most used artificial-intelligence assistant globally by year-end.
Meta's Reality Labs investments are an area of investor debate, with the unit generating $16.7 billion of operating losses over the past 12 months.
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That said, Wedbush thinks Reality Labs investments are becoming more synergistic with the core business as AI becomes a more central component of existing and upcoming hardware products.
New products within the Quest 3 family and upcoming AR hardware like Orion present significant optionality for Meta as the company looks to build next generation.
Wedbush has an outperform rating on the shares with a price target of $600.
TheStreet Pro's Chris Versace boosted his price target for Meta Platforms to $630 from $575 following the Connect event.
"We found those product announcements interesting, and while some will no doubt jump up and down about them, we’ll take our cues from adoption rates once they are out in the wild," he said. "What these products reinforce is that AI will not be limited to PCs, smartphones and tablets."
As we see more AI devices being adopted, he said, "that usage will continue to feed the virtuous circle of content creation and consumption."
"That, in turn, will drive network capacity utilization levels higher, which meshes with our underlying thesis for Marvell’s (MRVL) non-AI and data center business segments," the veteran fund manager said.
Versace said that what stood out for him was Zuckerberg’s comments about the company's AI models, including Llama 3.2, which will power new features and enable developers to build their own AI tools.
Zuckerberg also said that Meta’s AI assistant has about 500 million monthly active users, and he suggested that it was on track to be the most-used AI assistant by the end of this year, he said.
"Putting these announcements together shows that Meta has made meaningful progress on AI as it weaves together voice, video and translation that have the potential to drive greater interaction across Meta’s platforms,," Versace said.
"Our thinking is that should drive content consumption and advertising revenue as well as margin improvement in the coming quarters," he noted.
Versace said that he was boosting his Meta price target to reflect that potential, "but as we make that move, we also recognize that when investment spend returns to more normalized levels, we’re likely to see even more margin improvement at Meta."
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