Meta Platforms - AI Focus For Future Growth Is A Winning Strategy
πππSocial media is very much part of our daily lives and 1 company does it better than anyone else - $Meta Platforms, Inc.(META)$
Meta Platforms is set to report its Q1 24 earnings on Wednesday. Wall Street Analysts are bullish on Meta's earnings. They project Meta's revenue will rise 17% to USD 158 billion on 2024, after climbing 15.7% in 2023. This is according to FactSet.
Despite Meta's push into AI and Metaverse, Social media advertising remains the core of Meta's business. About 98% of its revenue is from advertising on its Family of Apps. This incudes Facebook, Instagram, Messenger, Reels, WhatsApp and Threads.
The huge user base for Facebook and Instagram paired with AI Powered advertising sales platform, help Meta to dominate social media advertising. According to eMarketer, a research company, Meta will capture 21.9% of all US digital advertising sales in 2024. Only Google has a bigger projected share with 27.4% while Amazon is 3rd with 8.5% of the market.
Another good news for Meta is that one of its biggest competitors Tik Tok could be banned in the US or it has to be sold by its Chinese parent company ByteDance. The US House of Representatives voted in favour of the Bill on March 13. It is still waiting for approval in the Senate Committee.
Meta's share price surged 20% following its Q423 earnings report in February. That is the pivotal moment when Meta joined the Trillion Club with a market capitalisation of USD 1.23 Trillion after gaining nearly USD 200 billion on a single day.
Meta had a outstanding Q423 earnings with earnings of USD 5.33 per share and sales of USD 40.1 billion. Sales for the quarter increased 25% year over year while earnings jumped 203%.
In addition to that, Meta said that it is paying a dividend of 50 cents per share. This is the first time ever that Meta has paid dividends.
Meta has recently launched its most significant AI push todate. On April 18, CEO Mark Zuckerberg announced a series of new updates for its Meta.ai chatbot. The chatbot is powered by Meta 's Llama large language model, which also received a big update.
Mark Zuckerberg' s goal is to build the world 's leading AI. Meta is featuring the chatbot more prominently across Facebook, Instagram, Messenger, WhatsApp and Threads. Meta has also launched a stand alone website for the bot at Meta.ai. This launch is Meta' s challenge to ChatGPT, the AI chatbot from OpenAI. Mark Zuckerberg said that he views Meta.ai as the most intelligent AI assistant that one can freely use.
Meta has also announced the latest version of its custom computing chip for AI in an effort to optimise its data centres for the massive amount of computing power behind AI. This chip will power Meta's AI research.
Next to AI, Meta is still committed to building products for the virtual world of Metaverse. But Metaverse has been a costly bet for Meta. Last year Meta's Reality Labs Division had a operating loss of USD 16 billion versus USD 13 billion and USD 10 Billion losses in 2021 and 2022.
In 2024, analysts project that Reality Labs will post an operating loss of USD 19 billion according to FactSet.
However sales for Reality Labs surpassed USD 1 billion in Q423 for the first time due to the launch of Meta's latest VR headset, the Quest 3.
Performance wise, Meta is up 0.14% today and in the past 5 days it has dropped 3.3%. However Meta had risen 39% year todate. In 2023, Meta has jumped 126%.
Wall Street Analysts are bullish on Meta Platforms with a Strong Buy rating, Target price of USD 547.45, an upside potential of 13.6% according to 40 analysts surveyed by Tipranks.
It is exciting times ahead for Meta Platforms as it powers its way to the future with its twin goals of AI and Metaverse. As we await its Q124 earnings report tomorrow, I am filled with quiet confidence and optimism that it will continue to grow exponentially in the future.
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Modify on 2024-04-25 06:25
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This will be a monster after earnings tomorrow. Tesla has a horrible earnings report and getting rewarded but Netflix got slapped around last week
Meta is strong Iβll keep holding it