Meta Platforms (META), the parent company of Facebook, may receive a "massive financial windfall" from chatbots powered by generative AI on its WhatsApp messaging service, per a recent analyst study. Wednesday morning trade saw Meta's stock rise.
Ralph Schackart, an analyst at William Blair, told clients on Tuesday that he believes GenAI would enable WhatsApp (and eventually Instagram and Facebook) chatbots to develop into "intelligent conversations" or more intimate talks with businesses. "These chatbots will likely evolve from customer service agents to top-of-funnel assistants to help drive e-commerce sales."
According to the analyst note, the company is in the testing stage of providing GenAI solutions to WhatsApp businesses in English-speaking nations. Businesses are currently charged 2.5 cents each chat, 24 hours a day, by Meta. But Schackart said there is "runway" to increase pricing as customers get more used to interacting with chatbots.
According to Schackart, generative AI chatbots might generate an additional $16.6 billion in 2025 and as much as $45 billion by 2030, given that WhatsApp has an estimated 2.7 billion subscribers. According to FactSet, experts predict that Meta's 2025 revenues will be an average of $186.7 billion.
Schackart predicted that Meta's stock price may hit 750 within a year, even before that possible jump. He assigns an outperform rating to the stock.
At 614.31, Meta's stock is up 3% on the stock market today. On fresh evidence that core pricing pressures decreased more than anticipated in December, stocks are generally rising.
Meta Stock: The Drive for Business AI
William Blair's optimistic assessment coincides with Meta's preparations for a larger push into providing AI services to companies. In November, the business appointed Clara Shih, a former CEO of Salesforce (CRM) AI, to head a Business AI team at Meta.
WhatsApp, which Meta purchased for $19 billion in 2014, is a key component of their initiatives. On Facebook and Instagram, Meta currently provides click-to-message advertisements that start a dialogue between customers and companies via its Messenger app or WhatsApp. In 2023, Chief Executive Mark Zuckerberg told analysts that the yearly revenue from that type of advertising topped $10 billion and that year.
In the meantime, Meta has spent billions on its own AI large language model, Llama, which it claims is open-source and accessible to other developers. The Meta.ai chatbot, which the business has incorporated into Facebook, Instagram, and other apps, is powered by Llama.
Buy Point for Meta Stock Retakes
According to MarketSurge, Meta stock retook a 602.95 flat base purchase target after its gains on Wednesday. With a 2.3% decline on Tuesday, shares dropped below both that level and Meta's 21-day moving average.
Another IBD Leaderboard stock is Meta.
According to IBD Stock Checkup, the social media stock has an IBD Composite Rating of 98 out of a possible 99. Five distinct proprietary ratings are combined into a single score. Composite Ratings of 90 or higher are indicative of the top growth stocks.
An increasing tide is advantageous to Meta.
In response to the Bureau of Labour Statistics' most recent news release, stocks saw a general increase today. In December, the core Consumer Price Index (CPI) increased by 3.2%, which was just less than the 3.3% increase predicted by experts.
Despite not being directly impacted by interest rates, Meta is sensitive to the state of the economy because it depends on advertising, and lower interest rates typically stimulate company spending.
According to media reports yesterday, the corporation intends to let off 5% of its employees, including those who are thought to be its worst performers. Following the announcement of a significant workforce reduction by the end of 2022, Meta's stock surged, and investors appear to be hoping that the upcoming layoffs will boost profitability as well.
In addition, if TikTok is not sold in a way that complies with regulations or the Supreme Court doesn't step in, it will be outlawed in the United States on Sunday. In the event of a ban, users may switch to Meta's platforms. Since Meta introduced Reels, its short-form video product, years ago, Instagram and Facebook have already begun to actively compete with TikTok.
