Wall Street is bullish on Meta earnings as analysts eye an AI boost for the tech titan

• Wall Street analysts person precocious hopes for Meta's third-quarter net study connected Wednesday.
• Investors are keeping an oculus connected maturation opportunities from AI.
• Bank of America has said nan banal is simply a apical AI pick.

Wall Street analysts are upbeat up of Meta's third-quarter net study connected Wednesday aft nan closing bell.

Analysts mostly expect affirmative gross and net figures, acknowledgment to nan Facebook parent's AI advertisement optimization and nan firm's sweeping costs cuts, which included respective rounds of layoffs successful caller years and saw nan patient backing distant from immoderate of its virtual reality projects.

Investors will beryllium keeping a adjacent oculus connected signs Meta tin proceed that growth, pinch nan institution reportedly moving connected a caller hunt instrumentality that will surf nan web for its AI chatbot.

Wall Street is besides looking for beardown guidance for nan existent quarter, though analysts spot imaginable for costs to travel successful higher than expected.

Here's what analysts are saying up of nan tech giant's net report.

"Long-term communicative is arsenic beardown arsenic ever": Bernstein

Meta's long-run maturation trajectory looks solid, according to Bernstein elder expert Mark Shmulik.

The banal is up 70% this twelvemonth and is up 550% since bottoming successful 2022.

"Near word consequence and reward feels balanced," Shmulik wrote successful a note, adding that nan patient had a "perma-bull position connected each things Meta."

"But nan semipermanent communicative is arsenic beardown arsenic ever. As we look up we're constructive connected nan halfway business pinch an expected motorboat of ads connected Threads, continued Reels ramp, much AI/Advantage+ advertisement devices connection investors top-line upside pinch a imaginable TikTok prohibition not presently priced in," he later added.

The patient issued an "Outperform" standing connected nan banal and a $675 value target, implying 15% upside from existent levels.

"Uniquely good positioned to monetize search": JMP

Meta's reported hunt motor could beryllium a immense affirmative for nan company, JMP analysts said successful a note.

"Meta is uniquely good positioned to monetize hunt fixed its 200M+ progressive SMBs and 12M+ progressive advertisers," nan patient wrote. "To that end, we judge Meta could connection a compelling commercialized acquisition for hunt fixed its existing advertiser and SMB relationships while besides utilizing hunt intent awesome to powerfulness its halfway advertizing merchandise connected Facebook and Instagram."

The hunt tool, though, could raise superior expenditures and costs, analysts said, perchance by much than investors are expecting.

The patient issued an "Outperform" standing connected nan banal and a $635 value target, implying an 8% summation from existent levels.

"Top AI pick": Bank of America

BofA analysts expect a "modest" net hit from nan tech elephantine connected Wednesday. They forecast nan patient to study arsenic overmuch arsenic $47.5 cardinal successful revenue, which would correspond an 18% year-over-year increase.

Meta is simply a "top AI pick," nan analysts added, pointing to a fistful of tailwinds, for illustration beardown maturation successful Meta's AI-powered ads business, continued maturation among younger users, and much AI maturation opportunities successful general.

"Our checks propose Meta could spot place from: 1) caller AI devices and caller CRM integration driving higher ROI and incremental advertisement spend, 2) ramping messaging and Reels monetization, and 3) humble (100-200bps) governmental advertisement walk benefit," analysts wrote.

The slope reiterated its "Buy" standing and $630 value target connected nan stock, implying 7% upside from existent levels.

"Clear leader successful societal media": Morningstar

Meta is simply a "clear leader" connected an "unmatched scale" successful nan societal meaning space, Morningstar said successful a caller note, pointing to nan firm's 4 cardinal monthly progressive users crossed its applications.

Investors though, are keeping hawkish oculus complete signs Meta tin prolong its growth, according to Dave Sekera, Morningstar's main US marketplace strategist.

"The marketplace is going to beryllium listening for immoderate update connected capex spending, specifically connected generative AI. I'd really for illustration to perceive from them much specifically astir really and erstwhile they will beryllium capable to monetize that spending. That's nan large mobility for Meta," Sekara said. "Other than that, I'll beryllium listening for an update connected maturation and integer ads; they had a large use from advertisement spending successful Temu and Shein complete nan past mates quarters, truthful nan mobility is whether that maturation will proceed aliases will it commencement to slow."

The patient antecedently issued a 3-star standing for nan banal and a adjacent worth of $560, implying 5% downside from existent levels.

"A reliable barroom to surpass": CFRA Research

Meta could look challenges up owed to nan consequence that maturation decelerated successful nan past quarter, CFRA Research said.

"META has a reliable barroom to surpass successful upcoming Q4 2024 and Q1 2025. We estimate Q3 maturation decelerated to 18% from 22% successful Q2 and spot further deceleration to 15% successful Q4 2024 and 13% successful Q1 2025," CFRA elder equity expert Angelo Zino wrote.

He added that nan situation successful nan coming quarters will beryllium to support up pinch beardown maturation compared to nan year-ago quarters.

"We deliberation year-over-year deceleration is owed to lapping beardown maturation from China-based advertisers arsenic good arsenic beardown Reels belief maturation from a twelvemonth ago. Still, we deliberation integer advertisement trends stay healthy, pinch broad-based wellness crossed astir regions and verticals," Angelo Zino, a elder equity expert astatine CFRA, wrote.

CFRA raised its value target connected nan banal to $650 a share, implying 11% upside.