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The analysts, who have an Overweight rating and a $410 price target on Meta shares, said the firm believes consumer adoption of AI products and services will likely come in waves, not in a straight linear path up.
“META’s announcements last week could mark the second major wave of consumer AI adoption,” they said. Barclays believes the horizontal all-encompassing “META AI” is likely to be comparable in capability to ChatGPT, while the AI agent can access information from the web, answer questions, generate stickers and images, and other use cases.
“More importantly, META also introduced 28 “theme-based vertical-specific” AI agents. These look similar to Character.ai but META’s product teams have done a nice job of humanizing the service with celebrities and personalities,” the analysts added.
They revealed that the firm estimates Meta Platforms’ new AI agents could impact the business model.
The analysts noted they could “1) increase overall engagement for 800m+ users in ’24, 2) increase 2024 core ad revs by $16B from higher CPM and better targeting, 3) increase COGS to the tune of $10B+ on higher inference cost and D+A.”
“Most importantly, if these AI agents serve as a new interaction layer where users increasingly access information and transactions via the four mega-apps (WhatsApp, Messenger, Instagram and Facebook) across 3B+ DAPs, META shares would likely re-rate higher,” they added.
