Barclays maintains Meta stock rating, sees revenue boost from WhatsApp and Threads

Investing.com - Barclays has reiterated its Overweight rating and $810.00 price target on Meta Platforms Inc. (NASDAQ:META), citing potential significant revenue growth from WhatsApp and Threads platforms. The company, currently trading near its 52-week high of $796.25, enjoys strong analyst support with 32 analysts recently revising earnings estimates upward, according to InvestingPro data.

The investment firm projects WhatsApp and Threads could generate up to $6 billion and $19 billion in incremental ad revenue in 2026 and 2027, respectively. These projections build upon Meta’s already impressive performance, with current revenue of $178.8B and strong growth of 19.37% year-over-year. WhatsApp Status ads are expected to create substantial inventory across its 1.5 billion-plus daily active users, though CPMs may trail other Meta platforms due to geographic mix and targeting limitations.

Barclays notes that while Threads is comparatively smaller than WhatsApp, its feed-ads might deliver higher monetization potential given its user base in regions with higher per-capita ad revenue. These two platforms alone could enable Meta to exceed consensus growth estimates of 16% and 15% over the next two years.

The firm acknowledges some potential cannibalization when new ad surfaces launch, as additional inventory supply typically creates downward pressure on auction pricing. However, unlike the Reels transition on Instagram and Facebook in 2022-2023, Barclays does not anticipate usage shifting away from higher monetization surfaces.

Meta AI remains a "call option" according to Barclays, though the firm did not include any revenue projections from this service in its current analysis. With an industry-leading gross profit margin of 81.97% and strong financial health metrics, Meta continues to demonstrate operational excellence. For deeper insights into Meta’s valuation and growth potential, including 13 additional exclusive ProTips, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Unity Software has been in the spotlight after Meta Platforms announced it would replace Unity’s runtime engine with its own Meta Horizon tool for augmented and virtual reality applications. Despite the initial negative perception, Morgan Stanley reiterated its Overweight rating on Unity Software, maintaining a price target of $40.00. The investment bank noted that Unity does not monetize the runtime component, meaning Meta’s decision should not impact Unity’s revenue or profit. Meanwhile, Meta Platforms has been active with its Connect conference, where it unveiled new AI smart glasses, including the Meta Ray-Ban Display. Following this announcement, both Stifel and Truist Securities reaffirmed their Buy ratings on Meta, with price targets of $900.00 and $880.00, respectively. The firms expressed optimism about Meta’s long-term growth prospects, particularly in AI and metaverse initiatives. Additionally, Meta has been in discussions with major media companies for potential AI content licensing agreements, aiming to integrate news content into its AI offerings. These developments highlight ongoing strategic moves by both Unity Software and Meta Platforms in the tech industry.

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