New products announced by Meta Platforms focused on WhatsApp and its Messenger app are an "important step" toward expanding its messaging-based revenue, according to a Baird analyst. Baird's Colin Sebastian raised his price target for Meta stock to 740 from 635 in a client note Wednesday.
At a conference in Miami on Tuesday, Meta announced several product updates aimed at helping businesses interact with customers using the WhatsApp, Facebook, Instagram and Messenger apps the company owns. That includes a centralized advertising manager that will work across the three apps. Meta is also offering more options for customers to call businesses through a WhatsApp chat. A blog post from Meta said the company is also "exploring a Business AI that can make personalized product recommendations and facilitate sales on any business' website." The product will soon be available to businesses in Mexico.
"We believe Meta is increasingly focused on commercializing messaging, and using AI as a cornerstone to drive engagement and monetization," Sebastian wrote. "Further down the line, we believe this product focus could help increase growth prospects for WhatsApp/Messenger, with a potential $40-50 billion revenue opportunity by 2030."
Sebastian reiterated an outperform call for Meta stock with the note. He cited positive takeaways from Tuesday's event, along with recovering earnings multiples for tech stocks and "largely constructive" checks with sources within the industry.
On the stock market today, Meta stock traded sideways, last up a fraction to 719.61.
Meta Stock: Business Messaging Key To AI Push
Meta stock climbed to a record 747.90 in trading Monday, its first new high since Feb. 14. Shares gained as the company announced a new "Meta Superintelligence Lab" focused on AI advances. The company recruited researchers from OpenAI and other competitors for the effort.
The stock pulled back with a 2.5% decline on Tuesday. But the stock is ahead 23% overall this year, the best gain among Magnificent Seven stocks. Easing tariff concerns and optimism on Wall Street about Meta's digital advertising business and AI investments have helped the stock rally back from a slump earlier this year.
Meta Chief Executive Mark Zuckerberg has previously pointed to business messaging as a promising use for generative AI technology, as the Facebook parent company invests billions to build AI-related infrastructure and recruit top talent. He said during the company's first-quarter earnings call in late April that he sees business messaging as the "next pillar" of Meta's business.
"In the next few years, I expect that just like every business today has an email address, social media account and website, they'll also have an AI business agent that can do customer support and sales, " Zuckerberg said.
That could bring greater focus to WhatsApp, which Meta acquired in 2014 but has been slow to fully monetize. Last month, Meta announced it would incorporate advertising on WhatsApp for the first time.
