According to a Wall Street Journal report, tech and entertainment giant Tencent (TCEHY) could partner with Meta (NASDAQ:META) to sell the latter’s Quest 2 VR (Virtual Reality) headsets in China. The report highlighted that Tencent proposed the deal, and discussions are in an early stage.
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Meta is a leading player in the VR space. Its VR ecosystem is expanding, and the company boasts of having over 200 apps on its VR devices that have garnered over $1 million in revenue.
While Meta is growing its VR ecosystem, its headsets and apps are yet to be officially sold in China. At the same time, Meta is facing competition from Pico, owned by TikTok’s parent company, ByteDance. Pico’s shipments are multiplying, and the company is gaining market share.
Thus, a deal with Tencent could significantly boost Meta by expanding its serviceable market and driving shipments.
Whether Tencent and Meta will reach a deal remains a wait-and-watch story. Meanwhile, the social media giant announced a new subscription plan called “Meta Verified” for Facebook and Instagram. The plan to monetize its platform through subscriptions could add a new revenue stream for the company and might reduce the dependency on ad revenues in the long term.
While Meta is taking measures to drive engagement and strengthen its platform, let’s check what analysts recommend for the company.
Is META a Buy or Hold?
Meta stock has 34 Buy, six Hold, and two Sell recommendations from Wall Street. This translates into a Strong Buy consensus rating.
While Meta stock has gained about 44% year-to-date, analysts’ average price target of $215.20 implies 24.48% upside potential.
