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META Expands Portfolio at Connect: Right Time to Buy or Still a Hold?
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Meta Platforms (META - Free Report) expanded its portfolio at Connect on Wednesday with the launch of a cheaper Quest 3S headset, Orion Augmented Reality (AR) glasses, new AI features for Ray-Ban Meta glasses and new multimodal features for Meta AI.
Quest 3S offers the same mixed reality experience and fast performance as Meta Quest 3 at a lower price of $299.99. It also dropped the price of the Quest 3 512 GB version. The developments are expected to improve META’s competitive prowess against Apple’s (AAPL - Free Report) AR device - Vision Pro.
The new Orion AR glass has the largest field of view when compared with its small form factor. Supported by Meta AI smart assistant, the glass understands what a user is looking at in the physical world and can help the user with visuals. Although Orion, at its current avatar, will not be available to the public, Meta Platforms plans to use it extensively for development purposes.
Ray-Ban Meta AR Glasses Gets New AI Features
The company is adding new AI features to Ray-Ban Meta glasses. Meta AI will make it easier to make conversations. It is also getting video capability. The AR glasses can now remember things like parking spots, while users can set reminders through voice commands for important tasks.
Ray-Ban Meta glasses will be able to translate speech from different languages, including Spanish, French and Italian to English soon through its open-ear speakers.
Expanding integrations with Spotify (SPOT - Free Report) and Amazon Music, as well as new partnerships with Audible and iHeart, are expected to offer an enhanced experience to Ray-Ban Meta AR glass users.
Meta AI Gets Voice Capability, Can Edit Photos
Meta AI, currently used by more than 400 million on a monthly basis, is getting voice capability. Users can talk to Meta AI on Messenger, Facebook, WhatsApp and Instagram DM and it will respond back at different voices.
Users can choose from the AI voices of Awkwafina, Dame Judi Dench, John Cena, Keegan Michael Key and Kristen Bell to give voice to their own Meta AI assistant.
Users can now share photos in chats with Meta AI, which now has the ability to answer questions about it. Meta AI can now edit photos users share in a chat.
Meta Platforms is expanding Meta AI’s Imagine features on Facebook, Instagram and Messenger.
META’s Data Trove Makes the Stock an AI Behemoth
AI is heavily dependent on data, of which META has a trove, driven by its more than 3.2 billion daily users. Meta Platforms has been leveraging AI to improve the potency of its platform offerings, including WhatsApp, Instagram, Messenger and Facebook.
Its staggering reach and increasing ad impressions (up 10% year over year in second-quarter 2024) make META one of the most important players in the digital ad sales market apart from Alphabet (GOOGL - Free Report) .
Meta Platforms is leveraging AI to boost Facebook’s appeal among young adults (18-29-year-olds), a demography that used to prefer Alphabet’s YouTube and Snapchat.
META is incorporating AI tools into WhatsApp to make businesses more customer oriented. It is expanding business AIs that can talk to their customers, offer support and facilitate commerce to several businesses that use click-to-message ads on WhatsApp and Messenger in English.
Meta Platforms’ generative AI ad tools are gaining strong adoption. More than a million advertisers used the tools and 15 million ads were created with them in the last month.
META Rises 61% YTD: What Should Investors Do?
Meta Platforms’ shares have returned 60.6% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 23.4% and the Zacks Internet Software industry’s appreciation of 21.1%.
META Outperforms Sector YTD
Image Source: Zacks Investment Research
Meta Platforms is aggressively spending on developing AI infrastructure and now expects to spend between $37 billion and $40 billion on these efforts in 2024. This should not be a concern for investors, given its strong cash balance of $58.08 billion as of June 30, 2024.
Meta now expects to invest significantly more over the next few years in developing more advanced models and the largest AI services in the world. It is already working on Llama 4.
However, monetization of these AI services will take considerable time, which is a concern. Increasing regulatory headwinds have been a constant bother for META investors.
META’s Estimate Revision Shows Upward Movement
The Zacks Consensus Estimate for 2024 earnings is pegged at $21.36 per share, up 0.3% over the past 30 days, indicating a 43.64% year-over-year increase.
The consensus mark for third-quarter 2024 earnings is pegged at $5.15 per share, up by a penny over the past 30 days, indicating a 17.31% year-over-year increase.
META Stock Overvalued
META stock is not so cheap, as the Value Score of C suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales ratio, META is trading at 8.07X, higher than its median of 7.22X and the Zacks Computer & Technology sector’s 6.32X.
Image: Bigstock
META Expands Portfolio at Connect: Right Time to Buy or Still a Hold?
Meta Platforms (META - Free Report) expanded its portfolio at Connect on Wednesday with the launch of a cheaper Quest 3S headset, Orion Augmented Reality (AR) glasses, new AI features for Ray-Ban Meta glasses and new multimodal features for Meta AI.
Quest 3S offers the same mixed reality experience and fast performance as Meta Quest 3 at a lower price of $299.99. It also dropped the price of the Quest 3 512 GB version. The developments are expected to improve META’s competitive prowess against Apple’s (AAPL - Free Report) AR device - Vision Pro.
The new Orion AR glass has the largest field of view when compared with its small form factor. Supported by Meta AI smart assistant, the glass understands what a user is looking at in the physical world and can help the user with visuals. Although Orion, at its current avatar, will not be available to the public, Meta Platforms plans to use it extensively for development purposes.
Ray-Ban Meta AR Glasses Gets New AI Features
The company is adding new AI features to Ray-Ban Meta glasses. Meta AI will make it easier to make conversations. It is also getting video capability. The AR glasses can now remember things like parking spots, while users can set reminders through voice commands for important tasks.
Ray-Ban Meta glasses will be able to translate speech from different languages, including Spanish, French and Italian to English soon through its open-ear speakers.
Expanding integrations with Spotify (SPOT - Free Report) and Amazon Music, as well as new partnerships with Audible and iHeart, are expected to offer an enhanced experience to Ray-Ban Meta AR glass users.
Meta AI Gets Voice Capability, Can Edit Photos
Meta AI, currently used by more than 400 million on a monthly basis, is getting voice capability. Users can talk to Meta AI on Messenger, Facebook, WhatsApp and Instagram DM and it will respond back at different voices.
Users can choose from the AI voices of Awkwafina, Dame Judi Dench, John Cena, Keegan Michael Key and Kristen Bell to give voice to their own Meta AI assistant.
Users can now share photos in chats with Meta AI, which now has the ability to answer questions about it. Meta AI can now edit photos users share in a chat.
Meta Platforms is expanding Meta AI’s Imagine features on Facebook, Instagram and Messenger.
META’s Data Trove Makes the Stock an AI Behemoth
AI is heavily dependent on data, of which META has a trove, driven by its more than 3.2 billion daily users. Meta Platforms has been leveraging AI to improve the potency of its platform offerings, including WhatsApp, Instagram, Messenger and Facebook.
Its staggering reach and increasing ad impressions (up 10% year over year in second-quarter 2024) make META one of the most important players in the digital ad sales market apart from Alphabet (GOOGL - Free Report) .
Meta Platforms is leveraging AI to boost Facebook’s appeal among young adults (18-29-year-olds), a demography that used to prefer Alphabet’s YouTube and Snapchat.
META is incorporating AI tools into WhatsApp to make businesses more customer oriented. It is expanding business AIs that can talk to their customers, offer support and facilitate commerce to several businesses that use click-to-message ads on WhatsApp and Messenger in English.
Meta Platforms’ generative AI ad tools are gaining strong adoption. More than a million advertisers used the tools and 15 million ads were created with them in the last month.
META Rises 61% YTD: What Should Investors Do?
Meta Platforms’ shares have returned 60.6% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 23.4% and the Zacks Internet Software industry’s appreciation of 21.1%.
META Outperforms Sector YTD
Image Source: Zacks Investment Research
Meta Platforms is aggressively spending on developing AI infrastructure and now expects to spend between $37 billion and $40 billion on these efforts in 2024. This should not be a concern for investors, given its strong cash balance of $58.08 billion as of June 30, 2024.
Meta now expects to invest significantly more over the next few years in developing more advanced models and the largest AI services in the world. It is already working on Llama 4.
However, monetization of these AI services will take considerable time, which is a concern. Increasing regulatory headwinds have been a constant bother for META investors.
META’s Estimate Revision Shows Upward Movement
The Zacks Consensus Estimate for 2024 earnings is pegged at $21.36 per share, up 0.3% over the past 30 days, indicating a 43.64% year-over-year increase.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
The consensus mark for third-quarter 2024 earnings is pegged at $5.15 per share, up by a penny over the past 30 days, indicating a 17.31% year-over-year increase.
META Stock Overvalued
META stock is not so cheap, as the Value Score of C suggests a stretched valuation at this moment.
In terms of the forward 12-month Price/Sales ratio, META is trading at 8.07X, higher than its median of 7.22X and the Zacks Computer & Technology sector’s 6.32X.
P/S Ratio (F12M)
Image Source: Zacks Investment Research
META currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.