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Investing.com - DA Davidson has reiterated its Buy rating on Meta Platforms Inc. (NASDAQ:META) stock, maintaining its price target of $825.00. Meta’s stock, currently trading at $749.92, has shown strong momentum with a 31% return over the past six months. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.
The research firm expects Meta to continue outgrowing Google’s advertising revenue, though it noted that Meta’s growth may decelerate due to tougher comparisons, including election-related spending. Meta’s impressive 19.4% revenue growth and industry-leading gross profit margin of 82% support this outlook. InvestingPro data reveals 12 additional key insights about Meta’s performance and valuation.
DA Davidson does not anticipate significant growth deceleration at Google, but indicated it is monitoring developments at OpenAI closely.
The firm specifically cited concerns that the likely introduction of advertising around ChatGPT could potentially create a headwind for Google Search advertising growth.
Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, has been expanding its advertising capabilities across its family of apps while also investing heavily in artificial intelligence and the metaverse.
In other recent news, Meta Platforms Inc. announced a joint venture with Blue Owl Capital to finance and operate the Hyperion data center campus in Richland Parish, Louisiana. The project is valued at approximately $27 billion, with Blue Owl Capital funds holding an 80% interest and Meta retaining 20%. Both companies have committed to funding their respective shares of the development costs. Meanwhile, Meta is cutting around 600 positions from its Superintelligence Labs artificial intelligence unit, impacting roles within the Facebook Artificial Intelligence Research unit and other AI teams. Despite these cuts, Meta continues its hiring efforts, indicating ongoing growth in other areas.
Furthermore, the European Union has charged Meta over its handling of illegal content on Facebook and Instagram, marking a significant legal challenge under the EU’s online-content rules. Analysts at Stifel have reiterated a Buy rating on Meta, maintaining a $900 price target, while Truist Securities also raised its price target to $900 from $880, citing expectations for earnings to align with or exceed a 22% year-over-year revenue growth. These developments highlight the diverse challenges and opportunities facing Meta Platforms in the current market environment.
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