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Meta Platforms (META) Expands AI Portfolio With New Solutions

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Meta Platforms (META - Free Report) is expanding its artificial intelligence (AI) solutions portfolio with the launch of AI stickers across its apps. Through these AI stickers, which are powered by the Llama 2 and Emu (model for image generation), users can generate customized stickers for chats and stories.

Over the next month, this new feature will be available to select English-language users across WhatsApp, Messenger, Instagram and Facebook Stories.

Meta is set to bring AI-based editing tools that will help users edit images or even co-create them with friends on Instagram. The company is set to launch features like Restyle and Backdrop that leverage Emu. Backdrop also leverages learnings from Meta’s Segment Anything Model.

The company is also launching Meta AI in beta, an advanced conversational assistant, which will be available on WhatsApp, Messenger and Instagram. Meta AI will also be available on Ray-Ban Meta smart glasses and Quest 3.

Meta, in partnership with EssilorLuxottica, is launching its next-gen Ray-Ban Meta smart glasses collection. Starting at $299, the latest glasses will be available beginning Oct 17 in retail stores. Moreover, Quest 3, Meta’s mixed-reality headset will be available beginning Oct 10.

Meta is also launching 28 more AIs in beta, with unique interests and personalities including Snoop Dogg, Tom Brady, Kendall Jenner and Naomi Osaka.

Meta’s Prospects Bright in 2023

Meta shares have returned 147.4% year to date, outperforming the Zacks Computer & Technology sector’s gain of 30.8%.

It is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver.

Family Daily Active People or DAP, defined as a registered and logged-in user who visited at least one of the Family products (Facebook, Instagram, Messenger and/or WhatsApp) on a given day, were 3.07 billion, up 6.6% year over year in the second quarter of 2023.

The company is leveraging AI to recommend Reels content, which is driving traffic on Instagram and Facebook. Its innovative portfolio, which includes Threads, Reels and Llama 2, is likely to aid prospects.

Meta expects total revenues between $32 billion and $34.5 billion for the third quarter of 2023. Favorable forex is expected to aid year-over-year top-line growth by roughly 3%.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $33.41 billion, indicating 20.55% year-over-year growth.

The consensus mark for third-quarter earnings is pegged at $3.53 per share, unchanged over the past 30 days.

Zacks Rank & Stocks to Consider

Meta currently has a Zacks Rank #3 (Hold).

Dell Technologies (DELL - Free Report) , NVIDIA (NVDA - Free Report) and Splunk are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DELL, NVDA and SPLK shares have returned 68.9%, 190.6% and 70.3%, respectively, on a year-to-date basis.

Long-term earnings growth rates for Dell Technologies, NVIDIA and SPLK are pegged at 12%,13.5% and 26.6%, respectively.


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