Veteran fund manager revamps Facebook stock price target after conference call

He came, he saw, he wore funky glasses..

Meta platforms (THE TARGET) CEO Mark Zuckerberg is said to be fascinated by the Roman Empire.

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He honeymooned in Rome, and two of his children, Augustus and Aurelia, are named after the emperors Augustus and Marcus Aurelius, Reuters reported.

Zuckerberg kept the Roman vibe going during the annual Meta Connect 2024 event in Menlo Park, California, 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 things that we’ve been talking about for a long time … they’re happening and we can start to see what the future of computing and the future of human connection is going to look like and it’s pretty awesome. “

Zuckerberg showed off the first working prototype of augmented reality glasses, called Orion, saying “this is the physical world with holograms superimposed on it.”

Mark Zuckerberg tried out Orion augmented reality glasses in September 2024.

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’re awesome, and they’re a glimpse into a future that I think is going to be pretty exciting.”

The Orion AR glasses are not yet available to users and are mostly for internal testing for now.

Related: Analysts Adjust Price Target on Meta Shares After Earnings

Among other announcements, Meta’s AI assistant will now respond to voice commands and give users the option to make the assistant sound like celebrities like Judi Dench, John Cena, Keegan-Michael Key, Kristen Bell and Awkwafina.

“I think voice is going to be a much more natural way to interact with AI than text,” Zuckerberg said.

The company poured tens of billions of dollars into its investments in artificial intelligence, augmented reality and other metaverse technologies, driving its 2024 capital spending forecast 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 its latest disclosures. It lost $16 billion last year.

Shares of Meta Platforms, parent of Facebook, Instagram and Whatsapp, closed at a record $576 on September 25. The stock is up 61% year to date and up 90% from a year ago.

Investment firms issue Meta research notes

Several investment firms have issued research notes on Meta Platforms, including Bank of America Securities, which raised their price target to $630 from $563 and reiterated a buy rating.

“We believe AI glasses have a much wider market potential than Google VR,” the firm said. “While Metaverse’s spending still seems hard to justify, long-term investors with glasses can have renewed optimism about Meta’s opportunity to be at the forefront of the next generation of personal computing devices.”

More importantly, B of A said, “the company appears to be successfully innovating around new AI capabilities, driving usage growth that may offset terminal value concerns, and we see Meta as the best AI choice in the consumer internet “.

Rosenblatt analyst Barton Crockett raised the company’s price target on Meta Platforms to $811 from $643 and maintained a buy rating on the stock.

The Connect 24 conference highlighted how Meta “uniquely offers category products that could be described as leading in consumer adoption,” the analyst said.

Crockett said the event also highlighted how Meta continues to advance its AI capabilities.

The analyst said Meta’s AI capabilities were part of a positive inflection in the company’s core advertising business that is yet to be fully captured in the stock.

Meta’s growth deserves a higher multiple, said Crockett, who raised his Wall-Street price target on the assumption that Meta can trade within a year at an Apple-like multiple of 30 times forward earnings.

Wedbush analysts said the event featured new product announcements and updates covering AR/VR hardware as well as consumer AI applications.

The event also featured a look at Orion, which it called a fully functional prototype of AR smart glasses that combines AR and AI together on a single device.

Fund manager: “Meta has made significant progress in artificial intelligence”

The investment firm says Meta is making encouraging progress along its AI product roadmap, with Meta AI on track to become the most used AI assistant globally by the end of the year.

Meta Reality Labs’ investments are an area of ​​investor debate, with the unit posting an operating loss of $16.7 billion over the past 12 months.

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That said, Wedbush believes that Reality Labs’ investments are becoming increasingly synergistic with the core business as AI becomes a more central component of existing and future hardware products.

New products in the Quest 3 family and upcoming AR hardware like Orion present significant options for Meta as the company looks to build the next generation.

Wedbush has an outperform rating on the stock with a price target of $600.

TheStreet Pro’s Chris Versace raised his price target for the 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’re out in the wild,” he said. “What these products reinforce is that AI will not be limited to computers, smartphones and tablets.”

As we see more AI devices being adopted, he said, “that use will continue to fuel the virtuous circle of content creation and consumption.”

“This, in turn, will lead to increased levels of network capacity utilization, which aligns with our core thesis for Marvell. (MRVL) non-AI and data center business segments,” said the veteran fund manager.

Versace said what stood out to him were Zuckerberg’s comments about the company’s AI models, including Llama 3.2, which will power new features and allow developers to build their own AI tools.

Zuckerberg also said that Meta’s AI assistant has about 500 million monthly active users and suggested that it is on track to become the most used AI assistant by the end of this year, he said.

“Putting these announcements together shows that Meta has made significant advances in artificial intelligence as it brings together voice, video and translation that have the potential to drive greater engagement across Meta’s platforms,” ​​Versace said.

“Our thinking is that it should drive content consumption and advertising revenue as well as margin improvement in the coming quarters,” he noted.

Versace said it is raising its Meta price target to reflect this potential, “but as we make this move, we also recognize that when capex returns to more normalized levels, we are likely to see even more upside of the margin at Meta”.

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