I read a good sell-side report from US broker Jefferies last week, about Meta Platforms. They have a $585 per share target on the company (the current price is around $520).
Their core thesis is that Meta could capture 50% of incremental industry ad dollars in 2024, which would be its highest ever and well above its 33% in 2023. What's more, they believe that global ad revenues could grow more than 20% in 2024.
Meta lost significant ad market share in 2022 following the Apple iPhone iOS14.5 privacy changes, but have since used AI tools to bounce back fast.
From the report: "Their AI recommendation engine has continued to improve with Reels driving 25% growth in time spent watching video. Secondly, their Advantage+ suite of ad tools have driven significant improvements in advertiser returns, well beyond competitors."
They say that Meta is seeing impressive momentum with something called "click-to-message ads". Finally, "early tests of Gen AI ad tools like image expansion, text variations, and background generation are driving meaningful improvements in click-through rates".