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Investing.com -- UBS raised its price target on Meta Platforms (NASDAQ:META) to $812 from $683 on growing confidence in the company’s ability to drive new revenue from artificial intelligence tools such as business messaging and its Meta AI assistant.
The brokerage said Meta is well positioned to monetize consumer and advertiser demand for AI products, while avoiding some of the risks tied to a slowdown in enterprise tech spending that could affect other software or cloud providers.
Meta shares rose 1.6% to $720.25 in afternoon trading.
UBS said its valuation now assumes a 28-times multiple on its full-year GAAP diluted EPS estimate of $28.79 for the period ending 2027, up from 24-times previously. The multiple reflects Meta’s potential to sustain faster advertising revenue growth by incorporating generative AI into its products, it added.
None of the expected long-term revenue from AI tools are currently factored into UBS or consensus models, the note said, while the costs tied to AI talent and infrastructure appear largely reflected in Meta’s guidance.
CEO Mark Zuckerberg highlighted business messaging and Meta AI as two of the company’s five main AI initiatives during its first-quarter earnings call in April. UBS said those two areas offer the clearest monetization potential over the longer term.
Meta, which owns Facebook, Instagram, and WhatsApp, has recently increased investments in generative AI and ramped up hiring in the space.
The company is also a key investor in Scale AI, a startup that provides data labeling services to train machine learning models.