Meta stock target raised as AI boosts WhatsApp, opening big revenue potential

Meta Platforms received a boost from Wall Street analysts this week as the company revealed new plans to make money from its WhatsApp messaging app using artificial intelligence, according to Investor's Business Daily, which reported on the analyst upgrade. The social media giant announced several new business tools at a Miami conference on Tuesday, including a centralized advertising system that will work across WhatsApp, Facebook, Instagram, and Messenger apps. Meta is also testing a Business AI system that can suggest products to customers and help complete sales on company websites, with Mexico being the first country to get access to this new feature. 

Baird analyst Colin Sebastian raised his price target for Meta stock from $635 to $740, calling these messaging improvements an important step toward growing revenue from business communications. The analyst believes Meta is focusing more on making money from messaging services and using AI to increase user engagement and business profits. Sebastian estimates that WhatsApp and Messenger could generate between $40 billion and $50 billion in revenue by 2030, as reported by Investor's Business Daily in their coverage of the analyst note.

However, not all analysts share this optimistic view of Meta's AI strategy, with Seeking Alpha presenting a much more critical perspective on the company's artificial intelligence investments. The investment analysis platform initiated coverage of Meta with a Strong Sell rating and set a price target of just $484, expressing serious concerns about the company's heavy spending on AI development without clear returns. Seeking Alpha's analysts argue that Meta is falling behind in the AI competition despite pouring billions of dollars into research and development. 

They point to rising capital expenditures and the loss of key AI talent as major problems that could hurt Meta's competitive position in the technology market. The analysis suggests that Meta's massive investments in AI infrastructure and talent recruitment are not producing the expected results, while regulatory challenges in Europe are creating additional headwinds for the company's advertising business. Seeking Alpha's research indicates that Wall Street earnings estimates may be too high, predicting that actual profits will fall about 10% below current forecasts due to regulatory costs and continued losses from the Reality Labs division.

Despite these concerns, Meta stock has shown strong performance this year, climbing 23% to become the best performer among the Magnificent Seven technology stocks, as noted in Barron's coverage of the company's recent momentum. The stock reached a record high of $747.90 on Monday before pulling back slightly, marking its first new peak since February 14th. Meta's stock gains have been supported by the announcement of a new Meta Superintelligence Lab focused on AI advances, with the company recruiting researchers from competitors like OpenAI to strengthen its artificial intelligence capabilities. 

CEO Mark Zuckerberg has identified business messaging as the next major growth area for Meta, comparing it to how every business today needs an email address and website. Barron's reported that Zuckerberg expects businesses to eventually have AI agents that can handle customer support and sales automatically. The company's focus on monetizing WhatsApp, which it bought in 2014 but has been slow to fully develop as a revenue source, represents a significant shift in strategy as Meta looks to diversify its income beyond traditional social media advertising.