Meta is poised to report its first-quarter earnings after the market closes today, following a strong start to 2024. The company has been riding the wave of interest in artificial intelligence, garnering attention for its coding efficiencies and cost-saving initiatives.
As of Tuesday’s close, Meta’s stock was up 40% year-to-date, significantly outperforming the S&P 500’s modest 6% gain. Analysts at JPMorgan noted that while AI has been a dominant topic among investors, the focus is now shifting towards recognizing Meta’s early successes in efficiency and cost savings.
RBC Capital highlighted Meta’s growing dominance in the ad business, particularly through Instagram Reels advertising. Ad volumes across Meta services have seen a significant increase, with Reels advertising taking the spotlight. This surge in ad loads on Reels has outpaced declines in volumes seen on platforms like TikTok.
On the other hand, Bank of America sees Meta’s AI assets as being under-appreciated. The bank expects Meta to benefit from highlighting its growing capabilities in artificial intelligence, along with a potential boost from increased ad spending during seasonal events like Easter.
Looking ahead, Meta faces potential headwinds in the form of China’s economic slowdown, which could impact ad spending in the first half of the year. Despite this, RBC Capital and Bank of America remain positive on Meta’s prospects, with price targets of $600 and $550, respectively.
Overall, analysts expect Meta to maintain its strong performance and market share, with a focus on AI development and continued growth in the advertising sector. As the company prepares to announce its first-quarter earnings, investors are eagerly awaiting insights into Meta’s profitability and future growth strategies.
