Analyst reset Meta stock price target ahead of Q3 earnings

Facebook started off with relatively clear-cut ad concentrated on, but things got interesting after they launched the like button in 2009.

People started to like the total lot from their favorite dog memes to movies and native bars. Facebook soon saw dollar signs, realizing all those thumbs-usacould provide advertisers with granular concentrated on options.

Now, Facebook's parent Meta Platforms (META) plans to make use of AI advertising to fuel growth. “We’re leveraging AI to provide increased automation for advertisers,” said CFO Susan Li at some stage within the July earnings call.

Meta has been updating its AI tool, Meta AI, to lend a hand advertisers create content more without difficulty. The corporate recently announced that greater than 1 million advertisers used its generative AI ad tools in September, creating 15 million ads and driving a 7.6% improvement in conversion rates.

Forrester Research Director Mike Proulx cautioned that Meta should now no longer fail to spot the important role of human involvement during the advertising process.

"Let’s be clear that it’s a ways off, if ever, prior to CMOs will simply hand over the keys to an AI agent to be in a position to autonomously generate ad creative on their behalf," Proulx said after Meta’s Q2 earnings.

Meta Platforms rosy Q3 outlook

In its 2d-quarter earnings report from July, Meta reported earnings of $5.Sixteen per share, beating Wall Side road's projection of $Four.Seventy three. The corporate generated $39.07 billion in revenue, surpassing the expected $38.31 billion.

Meta provided an optimistic forecast for the 0.33 quarter, projecting revenue from $38.5 billion to $forty-one billion, above analysts' $39.1 billion target.

Related: Analyst revisits Meta stock price target as Facebook parent ramps AI spend

"We had a powerful [second] quarter, and Meta AI is on target to be the foremost used AI assistant during the sector by the end of the year," said Zuckerberg, "We have gotten released the first frontier-level open source AI model, we continue to appear good traction with our Ray-Ban Meta AI glasses, and we're driving good growth across our apps."

Advertising sales remain the company’s main revenue source, making up over ninety eight% of total earnings. Fueled mainly by the Facebook and Instagram apps, ad revenue rose 21.6% in Q2 in comparison with the previous year.

Meta is ready to report its 0.33-quarter earnings on Wednesday, Oct. 30.

Analyst lift Meta stock price target prior to Q3 earnings

Meta’s sales continue to impress investors. UBS raised the Meta Platforms price target to $690 from $635 on Oct. 7, keeping a buy rating.

Ad budgets accelerated in August into September resulting from an uplift from a brand advertising recovery and improved consumer sentiment, the analyst tells investors in a research note pulled by thefly.com. Meta also benefited from political spending, optimization, and efficiencies, UBS says.

Guggenheim also raised the Meta's price target to $665 from $600 and with a buy rating.

Guggenheim expects investor attention on Q4’s ad-driven revenue forecast, projected at $Forty seven billion versus the $Forty six.2 billion consensus. Additionally, investors may are hunting for for 2025 guidance on expenses and capex and new insights on AI investment returns, the analyst says.

Guggenheim believes Meta is still the pinnacle destination for incremental ad dollars, supported by recent channel checks and industry-wide data trends in Q3.

In August, Barclays raised Meta's price target to $550 from $520 and kept an overweight rating after Q2 earnings.

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The analyst described Meta in a note as “the most effectiv p.c. of any company in digital advertising, with little revenue deceleration in spite of facing very not easy comps during the 2d 0.5 of 2024.”

Meta Platforms traded at $592.89 per share on October Eight. The stock is up greater than 70% year-to-date.

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