Social media titan Meta Platforms (META) is making a big change to how it shows ads and content across its platforms. Indeed, starting December 16, conversations with the Meta AI assistant will be used to help determine which ads and posts will be shown to users. Unsurprisingly, this change is part of Meta’s strategy to integrate its AI technology more closely with its main source of revenue, advertising. Meta AI, which works like ChatGPT, is already built into popular apps like Facebook, Instagram, WhatsApp, and Messenger. It is also available through a separate app and website.
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Interestingly, Meta says that over 1 billion people now use Meta AI every month, although that number includes usage across all apps. In addition, CEO Mark Zuckerberg has suggested that in the future, Meta could make money from AI by adding paid recommendations or offering a premium subscription for extra features and computing power. Separately, Christy Harris, who works on Meta’s privacy and data policies, stated that this shift to using AI interactions for ad targeting is something many users already assumed was happening.
She explained that asking Meta AI about family vacations, for example, might lead to seeing travel videos or hotel ads on Facebook. Even voice interactions through Meta’s Ray-Ban smart glasses will be included. However, chats through WhatsApp won’t count unless users link it with apps like Instagram. It is also worth noting that people can’t opt out of this new system, but if they don’t use Meta AI at all, the update won’t affect them.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 40 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $876.93 per share implies 22.5% upside potential.
