Meta's Connect showings brings it 'one step closer' to being AI company: Baird
Baird analysts stated that Meta Platforms is moving closer to becoming an AI company following its Connect event. They highlighted advancements in Reality Labs and AI, particularly with Orion AR glasses, Meta's AI assistant, and the Llama LLMs. While Meta prioritizes product usability over monetization, various revenue options are anticipated. The analyst maintains an Overweight rating on Meta, predicting significant value creation from its AI innovations, potentially making Meta AI the leading AI assistant by year-end.
- The unveilings by Meta Platforms (NASDAQ:META) at its Connect event have brought it "one step closer" to being an artificial intelligence company, investment firm Baird said.
- "This year's Meta Connect demonstrated, in our view, the company's substantial progress within Reality Labs and AI/GenAI - though we would call it more of an incremental update," Baird analyst Colin Sebastian wrote in a note. "Most notable were more details on Orion (prototype AR glasses), Meta's AI assistant, and the Llama family of open source LLMs. Understandably, Meta focuses on product and usability before monetization, although we continue to see a variety of monetization options, including search-based advertising, subscriptions, micro-transactions, and content sales, beyond higher engagement levels and better overall ad performance."
- Sebastian, who has an Overweight rating on Meta, added that the company's own AI services took further steps to becoming valuable.
- "We see meaningful value creation from Meta's ability to continue innovating practical use cases for AI; we note that Meta AI may be the most popular AI assistant by the end of the year," Sebastian explained.