Meta (META): Morgan Stanley Sees Substantial WhatsApp Monetization Potential

Meta Platforms Inc. (NASDAQ:META) is one of the top 10 picks from Harvard University’s stock portfolio. While the position in Meta was reduced quarter-over-quarter by around 62%, it accounted for the most significant chunk, 26%, of the portfolio.

On June 17, Morgan Stanley analyst Brian Nowak reaffirmed his Buy rating and a $650 price target on Meta Platforms (NASDAQ:META), citing the long-term revenue potential of monetizing WhatsApp. He highlighted Meta’s decision to introduce ads in the WhatsApp Updates tab as an early step toward building a new income stream from one of its largest platforms.

The analyst estimates that ad placements within the Updates section could generate between $3 billion and $5 billion in annual revenue by 2027, with an upside case reaching as high as $6 billion. Although monetization per user may remain lower outside the U.S., where most of WhatsApp’s 1.5 billion users are located, the analyst believes Meta’s ad infrastructure and scale could still support meaningful revenue growth.

His analysis assumes that users currently spend 2 to 4 minutes daily on the Updates tab, and if this grows to 12% of their time on the app, monetization could approach levels seen on Facebook. Under that scenario, the potential revenue contribution would add roughly 3% to Meta’s top line based on the analyst’s current forecasts.

He also believes that growing this way will also align with Meta’s broader strategy to grow revenue without disrupting the core user experience. While Meta’s diversification efforts outside advertising have been mixed, its core ad business remains strong, generating about 98% of total revenue in Q1 2025.

In the analyst’s view, WhatsApp’s monetization should support multi-year free cash flow growth as well as extend the company’s leadership in digital advertising. He sees this as an incremental lever that could contribute to both revenue growth and long-term shareholder value.

Meta Platforms Inc. (NASDAQ:META) focuses on providing social media platforms and virtual reality services. The company operates platforms such as Facebook, Instagram, WhatsApp, Messenger, and Threads, and also sells wearables like Oculus headsets, aiming to connect people and build communities through its services.

While we acknowledge the potential of META as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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