Weibo stock price target raised to $9.00 from $8.50 by BofA Securities

Investing.com - BofA Securities has raised its price target on Weibo Corp (NASDAQ:WB) to $9.00 from $8.50 while maintaining an Underperform rating on the Chinese social media company. The stock, currently trading at $11.72, has shown remarkable momentum with a 56.65% gain over the past year and trades near its 52-week high of $12.40. According to InvestingPro analysis, Weibo appears overvalued at current levels.

The price target adjustment follows Weibo’s advances in AI integration across its recommendation systems, intelligent search features, and advertising capabilities, according to BofA Securities analyst Miranda Zhuang. The company maintains impressive gross profit margins of 78.15% and trades at an attractive P/E ratio of 8.09.

In the second quarter, Weibo upgraded its recommendation algorithm, which increased users’ recommended content consumption mix to 43%, representing a 17 percentage point improvement.

The company’s intelligent search feature, powered by DeepSeek R1 and Alibaba (NYSE:BABA)’s Qwen, experienced significant user growth with monthly active users increasing 60% quarter-over-quarter to over 50 million, while query numbers rose 150% quarter-over-quarter in the second quarter.

Weibo also launched an AI content generation tool called Lingchuang and implemented AI in ad targeting, with AI-generated content contributing to more than 10% of advertising in the second quarter, while effective cost per mille (ECPM) improved by a single-digit percentage.

In other recent news, Weibo Corporation reported its second-quarter earnings, which exceeded analyst expectations. The company showed strong performance across its advertising business, contributing to revenue surpassing consensus estimates by 1.5%. Non-GAAP earnings also came in higher than anticipated, attributed to effective cost control measures. Following these results, Jefferies raised its price target for Weibo to $12.30, maintaining a Buy rating on the stock. These developments highlight Weibo’s ability to manage costs efficiently while delivering strong revenue figures. The company’s recent financial performance has been a focal point for investors and analysts alike.

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