Proactive Investors - Meta Platforms Inc (NASDAQ:FB)’s artificial intelligence (AI) assets are underappreciated in the stock price, analysts at the Bank of America (NYSE:BAC) (BoA) believe.
The analysts highlighted that the Facebook (NASDAQ:META) and Instagram parent company is testing more than 20 new generative AI features related to search, chat, and messaging to enhance the user experience and engagement.
“A large number of new features will make Meta AI personal assistant and text-to-image generating capabilities more embedded within the Meta ecosystem,” they wrote in a note to clients.
“In addition, Meta is experimenting with a long-term memory feature, so that AIs can include context from a user's previous conversations.”
The analysts also noted that to improve search results with video suggestions, Meta is also rolling out Reels in Meta AI chats.
“For example, if a user is planning a trip to San Francisco, they can ask Meta AI to recommend the best places to visit and share Reels of the top sites to help decide which attractions are must-sees,” they wrote. “We see some of this functionality overlapping with Google (NASDAQ:GOOGL).”
Meta’s growing AI capabilities leave room for upside in its valuation, the BoA analysts wrote.
“We think AI announcements support our thesis that AI-driven innovation at Meta will lead to new user experiences and recurring revenue models,” they wrote.
“With a massive capex budget, internal AI supercomputer, and inhouse large language model, we think Meta's AI assets are underappreciated in the stock price.”
The analysts have a ‘Buy’ rating on Meta and a US$384 price objective.
Meta shares traded hands at about US$332 on Friday afternoon.
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