By Emily Barry
Deutsche Bank analysts believe AI could help Instagram in many ways
Meta Platforms Inc.’s story has scored points among investors this year, as the company strives to shake off the perception that its brand has become obsolete in the wake of TikTok’s rise.
Analysts at Deutsche Bank say the company’s July 26 results could mark a rosy picture for Instagram, and the company’s momentum may be thanks in part to artificial intelligence.
Investors seem increasingly optimistic about META’s ability to perceive the digital ad market and efficiency gains, but also towards artificial intelligence driving “strong engagement and monetization trends.” Deutsche Bank’s Benjamin Black wrote in a note that it also relies on investments in , namely Instagram. to the client on Wednesday.
See also: Meta is no longer this analyst’s top pick for internet stocks.Here is an alternative to this
Black himself became optimistic about Mehta’s story in the face of the news, raising his price target from $290 to $350. “Recent ad checks show that ad spend has been on track throughout the quarter, with Facebook and Instagram doing better than their peers,” he said.
He sees meta as a potential beneficiary of the AI craze beyond its role in enhancing content recommendations to users. The company is also focusing on technology that powers its advertising services. Meta can use his AI and machine learning to help advertisers more easily create short-form video spots and respond to customer inquiries through Messenger.
These areas “should expand meta monetization opportunities,” Black said.
In the future, he is also positive about Meta’s ability to capitalize on the initial popularity of the Threads app, which was intended to provide an alternative to Twitter. “We note that the recently released Threads has already reached 100 million users, adding optionality to an already strong ad payback story,” he wrote. .
Read: Meta’s Threads Has Over 107 Million Users, Study Says
Barclays analyst Ross Sandler also commented on Thread on Wednesday, writing that it could mark the beginning of a “new phase” for the company.
He asked if Meta “is in a position to continue to leverage its infrastructure, graphs and AI to launch more and more dedicated standalone apps like Threads and Messenger,” adding that the company is “moving Reels from Instagram.” We could pull it off and put it on Instagram,” he suggested. With its own purpose-built app like TikTok, could he be more competitive without the strain of internal metrics and tradeoffs with his Instagram feed and Stories?”
“If this ‘platform’ strategy of launching apps from existing apps takes hold, we expect the P/E to fall.” [price-to-earnings multiple] The services allocated to META shares could expand significantly as they introduce many new use cases and opportunities to increase engagement and revenue,” Sandler said.
Opinion: On Meta’s Threads, Zuck took a chance and referenced Steve Jobs’ page
– Emily Barry
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07/12/23 1641ET
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