RBC Capital Reiterates Outperform on Meta, $770 PT

RBC Capital analyst Brad Erickson reiterated an Outperform rating and $770 price target on Meta Platforms Inc.

(NASDAQ: META).

“Superintelligence for every screen, face and hand; Management’s presentation at Connect was a good one with more partner announcements and details on Muse and two new hardware form factors with native Muse integration.

Incrementally, management announced several new large retail partners indicating Muse’s continued strong supply-side momentum (Walmart, Best Buy, Wayfair, etc) and mgmt reaffirmed its aim to eventually take a small transaction fee on Muse sales.

Additionally, it unveiled two new headline-worthy devices: much slimmer form factor VR glasses touted as fulfilling cinema, computer and console and the ‘one more thing’ was Muse Charm – a purposebuilt, fits-in-your-hand sized, voice-enabled AI device.

Stepping back, the fruits of Meta Superintelligence’s labor are clearly showing where it is squarely focused on model development to unlock Muse functionality & expanding use cases over time.

We’d expect recent momentum in META to continue with multiple expansion stemming from expanding shots on goal with the consumer (Ecom, search, etc).

Biggest unknown we’re hearing from investors is what happens to ads with agent shopping and user engagement mix shifting to voice?

While an impression headwind seems reasonably likely, the re-allocation of agent-created excess time will be a key determinant here which is obviously tbd.

While we’d expect competition to be forthcoming from OpenAI, GOOGL and potentially even AMZN or Apple, META’s clearly having its shining AI moment.

(See our comments earlier today and Sunday regarding Muse and its impact on marketplaces, ads, etc).”

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