After the tech company made several interesting announcements, a handful of Wall Street analysts released big-time price target increases on shares of Meta Platforms (NASDAQ: META). Since June 12, MarketBeat has tracked several analysts who updated their price targets on the stock.
On average, these analysts increased their price targets by nearly 12%. The most recent update comes from analysts at Cantor Fitzgerald. The firm increased its price target from $676 to $807. This is a huge 19% boost that now makes Cantor one of the most bullish analysts on Meta.
Overall, Cantor sees the stock rising nearly 16% from its June 23 closing price. In conjunction with this, the firm is also predicting that Meta will blow past its all-time high closing price of around $736.
So, what other information can investors draw from these recent analyst upgrades? And most importantly, what were the key announcements that Meta made that could help propel the stock to new highs?
All-Time Highs Are in Play Based on Wall Street Updates
The MarketBeat tracked consensus price target on Meta shares is $710, implying less than 2% upside compared to the stock’s June 23 closing price. However, focusing on those price target updates since June 12 evokes a much more bullish outlook. Outside of Cantor, Wells Fargo & Company (NYSE: WFC), Oppenheimer, and Bank of America (NYSE: BAC) also issued new price targets.
The average targets among these four updates come in at just under $753. That target implies almost 8% upside. Additionally, the large 12% average increase among their price targets indicates that Meta’s recent announcements significantly strengthened these analysts' outlooks. So, what were some of these announcements that contributed to the improved sentiment?
Zuckerberg’s Hand-Picked Superintelligence Team Can Drive Innovation
Meta has been making significant moves to build one of the world’s best artificial intelligence teams. This group of 50 experts is being dubbed the company’s “superintelligence team." Founder and Chief Executive Officer (CEO) Mark Zuckerberg is reportedly personally assembling this team to rival other tech giants.
One of the biggest hires so far is Alexandr Wang, the founder of Scale AI. Meta is buying a 49% stake in Scale AI for over $14 billion. Meta’s main motivation for doing so was hiring Wang to lead the superintelligence team. Paying such an enormous sum, largely just to hire one person, illustrates the bold swings Meta is willing to take. Meta has also reportedly hired Ilya Sutskever, an OpenAI co-founder, and Nat Friedman, former CEO of GitHub. Meta’s daring strategy to hire the best of the best is resonating with analysts as the AI talent battles in big tech heat up.
The Next Phase of WhatsApp Monetization Is Here
Another very important development around Meta is the fact that the company is now taking steps to significantly increase the monetization of its WhatsApp platform. On WhatsApp’s “Updates” tab, businesses will soon be able to purchase ads on the platform. This is a distinct part of the app, separate from where users see personal messages. This is key, as showing ads in that part of the platform would likely turn many users away. No one wants to see an ad simply to message their friends or family, and users would likely feel that their privacy is being invaded.
WhatsApp has 3 billion monthly active users, but it remains by far Meta’s least monetized social media platform. Meta says that 1.5 billion people use the Updates tab per day. This means the company can further monetize a large portion of WhatsApp’s user base without hurting engagement among the rest.
The company will also monetize the platform by allowing users to subscribe to updates from a certain business or content creator for a small monthly fee. Meta will slowly roll out these features over the next few months.
Many investors have wanted to see further WhatsApp monetization for years. The fact that this is happening now is another reason analysts have grown increasingly bullish on Meta. The company is also making a smart decision by doing this in a way that won’t disrupt the experience of users who don’t want to engage with these new features.
Overall, Meta’s recent moves are inspiring confidence among analysts. The success of Meta’s superintelligence team could unlock and create big new revenue streams for Meta down the road. Additionally, WhatsApp monetization can unlock value in a platform that Meta has spent years building. These factors are just two of many that could send Meta shares to new highs.
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The article "Analyst Sees Meta Hitting $800: What May Lead Shares to New Highs" first appeared on MarketBeat.
