Meta Platforms, Inc. (NASDAQ:META) is one of the AI Stocks Making Big Moves on Wall Street. On September 18, Citizens JMP analyst Andrew Boone reiterated a Market Outperform rating on the stock with a $900.00 price target.
In an investor note, the firm discussed how Meta has highlighted creative as the most important factor for winning the auction. The company explained its auction formula, and noted how ads with 5-10 creative themes had 24% higher return on ad spend, and video ads with audio had a 15% lower CPA than those without.
On engagement, Meta highlighted that 85% of content is shared on Instagram and that half of the time spent on the platform is on Reels. The firm noted how Boots UK realized a 4 times better conversion rate with message ads, which is the first time they have heard of scaled success with message ads from a Western retailer.
A person with stock market data on a laptop. Photo by Anna Nekrashevich on Pexels
“Meta highlighted the importance of creative. Meta again reinforced the importance of creative for performance as Nielsen Catalina attributes the majority of attribution to performance, with the Meta rep suggesting this is the most important variable for winning the auction. Specifically, she highlighted its auction algorithm, whereby total value in the auction equals advertiser bid multiplied by estimated user action rate plus user value, which is an ad quality measure. Additionally, ad creative with 5-10 creative themes has 24% higher return on ad spend, while video ads with audio had a 15% lower CPA than ads without video, and Meta reinforced that best-in-class DTC brands have mid-to-low-single-digits of spend dedicated to fatigued ads, which is a key benefit to offering high ad diversity. This leads us to believe it is still early for marketers in optimizing Reels performance. On engagement, Meta highlighted that today, 85% of content shared in Instagram is Reels, with 4.5B Reels reshared daily, while 50%+ of time spent on Instagram is on Reels. Lastly, Boots UK, a British health and beauty retailer, noted it realized a 4x better conversion rate with message ads, which is one of the first times we have heard scaled success with Message ads from a Western retailer.”
While we acknowledge the risk and potential of META as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than META and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 10 AI Stocks You Should Not Ignore and 10 AI Stocks in Focus on Wall Street.
Disclosure: None.
Hedge Fund Resource Center