Meta's AI-Powered Future At Connect 2023, Analysts Show Positive Reception

On Wednesday, Meta Platforms Inc META Chief Executive Mark Zuckerberg rolled out new AI products for consumers, including AI Assistants (Meta AI), image editing and generation tools (Emu, Backdrop, Re-Style), and a new platform for developing customized AI assistants (AI Studio) and an updated virtual-reality headset.

Morgan Stanley observes that Meta Connect has demonstrated remarkable technological advancements by harnessing the power of AI to create innovative use cases and potential avenues for monetization. 

To determine the viability of these monetization opportunities, it will be crucial to evaluate how Meta Connect distinguishes itself from competing products and closely monitor user and developer adoption rates.

KeyBanc Capital Markets writes that the highlight at Connect was the introduction of the Meta AI assistant, marking a significant development for Meta as it prepares to launch this assistant to a massive user base spanning WhatsApp, Messenger, and Instagram. 

The analyst anticipates that this move can potentially expand Meta's Total Addressable Market, creating opportunities for fresh use cases and revenue streams.

JMP Securities notes that Connected 2023 boosts confidence in the early stages of AI enhancing Meta's user and advertiser offerings. 

Meta gains ground in digital engagement and advertising budgets while maintaining cost discipline.

According to Mizuho Securities, while the announcements of Quest 3, smart glasses, and AI Assistants represent a positive progression in the existing technology roadmap, a notable absence is the inclusion of AI business/merchant tools for WhatsApp and Messenger. 

These tools have the potential to significantly enhance monetization opportunities for these messaging platforms, which currently harness just 5% of Meta's ARPU despite having billions of users.

BofA Securities said the event provided an initial glimpse into Meta's strategy for leveraging AI to enhance user engagement through chat, image creation, and introducing new business services. 

They anticipate a range of AI-powered tools catering to advertisers, facilitating ad creation, and streamlining campaign management.

Price Action: META shares are up 1.75% at $302.95 on the last check Thursday.