Meta stock rallies as rosy forecast shows AI helped boost ad sales
shares surged nearly 10 per cent on Thursday as a rosy revenue forecast showed that artificial intelligence was helping the social media giant boost engagement and ad sales even in an uncertain economy.owner was set to add over $70 billion to its market value, based on premarket movements, after strong second-quarter earnings encouraged 16 analysts to lift their target price on a stock that has already more than doubled this year.
While Meta’s 12 per cent rise in second-quarter ad revenue surpassed the three per cent growth at Alphabet’s Google, earnings reports from both the digital ad behemoths reinforced a recovery in the sector.Meta and Google are on track to add more than $170 billion to their combined market capitalization – a figure that is more than the individual market values of about 90% of the companies in the S&P 500 index.
The positive analyst view reinforces how a focus on cost cuts and higher engagement through AI has helped Meta turn into a Wall Street darling this year after being derided for much of 2022 for its hefty spending on the ambitious metaverse.Analysts have a median price target $342.50 on Meta, which represents an upside of 15 per cent to its stock’s last close. The company has 12-month forward price-to-earnings ratio of 21.28, higher than Alphabet’s 20.47 and the industry median of 15.18.
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