Meta Platforms stock gained in Monday trading, adding to a recent rally. The social media giant announced it would soon incorporate advertising into WhatsApp and also got a price-target hike from a Wall Street analyst.
The Facebook parent company announced in a blog post that it would show ads within WhatsApp, a move anticipated by investors since Meta acquired WhatsApp for $19 billion in 2014. The ads will appear in an "Updates" tab separate from users' personal conversations, Meta said.
"Your personal messages, calls and statuses remain end-to-end encrypted, meaning no one can see or hear them," the company said in the blog post. "That includes Meta. To show ads in Status or Channels you might care about, we'll use limited info like your country or city, language, the Channels you're following and how you interact with the ads you see."
WhatsApp has more than 3 billion monthly active users, Meta Chief Executive Mark Zuckerberg told analysts in April. Advertising drives about 98% of Meta's total revenue. But those sales are driven by Facebook and Instagram.
Meta's efforts to monetize WhatsApp so far have focused on click-to-message advertising. That's how the company categorizes ads on Instagram and Facebook that launch conversations between users and businesses either on WhatsApp or its Messenger app. Meta expects its AI chatbot to eventually help power those transactions as an AI agent for businesses.
Meta Gets Price Target Hike From Oppenheimer
Separately, Oppenheimer analyst Jason Helfstein reiterated an outperform call for Meta stock in a client note early Monday and increased his price target for the stock to 775 from 665.
The higher target reflects a "better-than-feared" advertising environment, he wrote, with a "tariff-induced recession seemingly off the table."
The Oppenheimer analyst upped his estimate for Meta's 2025 revenue by 4% and its 2026 revenue by 1%.
However, Helfstein also said Meta has "near-term AI risks." He expects Meta will further increase its capital expenditures in pursuit of its AI goals. There is "reasonable evidence" that Meta is struggling to further innovate on AI, he noted.
That includes the delayed launch for the flagship "Behemoth" version of Meta's Llama large language model. Meta last week agreed to invest $14.3 billion in Scale AI in a deal that had the start-up's chief executive join Meta.
"All together, Meta is likely to see higher (operating expenses)/capex to increase LLM capabilities," Helfstein wrote.
Meta Stock: Rallying In May And June
On the stock market today, Meta stock is up nearly 3% at 701.04 in recent trading.
Meta stock pulled back 2% last week following a breakout at the start of June.
Still, shares are ahead 8.5% overall for the month. Monday's gains are pushing Meta stock beyond a 5% buy zone above a 662.67 cup-with-handle buy point from the recent breakout, according to IBD MarketSurge.
Strong first quarter results and the 90-day pause for President Donald Trump's tariffs on good from China have helped Meta stock bounce back from a slide earlier this spring.
While still below a record high of 740.91 from mid-February, Meta's shares are ahead nearly 20% overall in 2025. That is the best overall year-to-date gain among the Magnificent Seven stocks.
