New Street Research upgraded Meta Platforms (NASDAQ:META) to Buy from Neutral, raising its price target for the stock to $350 from $285 in a note to clients Tuesday.
The firm's analysts told investors that the upgrade follows the release of Llama 2 and the positive feedback it has heard regarding the company's AI efforts.
Llama 2 is Meta's next generation of its open-source large language model.
"After reviewing details of the Llama 2 release...and particularly the broad-based support for META's open approach (a hallmark of the PyTorch machine learning framework originally developed by META, and now widely adopted), we believe the initiative will help META expand the use of its large language model considerably," wrote the analysts.
"The second catalyst for the rating change was the takeaways from our AI Speaker Series, where both Messaging and Metaverse/VR/AR were highlighted as top use cases for generative AI," they added. "As such, we have an improved longer-term outlook for monetization of WhatsApp and Messenger (perhaps a subscription-based gen AI agent available to businesses?) and the company's Metaverse initiatives, where gen AI capabilities should create significant efficiencies."