Josh Beck from Raymond James expressed a bullish outlook on Meta’s stock, attributing its recent gains to the company’s effective use of AI in enhancing user engagement and capturing a larger share of digital advertising revenue. He highlighted the potential impact of upcoming innovations, particularly smart glasses, on Meta’s financial outlook and valuation, suggesting that successful AI integration could lead to significant growth.
In a recent discussion, Josh Beck from Raymond James highlighted the positive momentum surrounding Meta’s stock, which has seen significant gains this year, particularly among the “Magnificent Seven” tech stocks. Beck maintains a bullish outlook on Meta, assigning a price target of $600. He attributes the recent stock performance to the company’s effective use of artificial intelligence (AI) in enhancing user engagement and driving a larger share of digital advertising revenue, despite broader macroeconomic concerns.
Beck pointed out that during Meta’s last earnings report, investor apprehension was evident regarding the company’s guidance and outlook. However, Meta’s assertion that macroeconomic factors were not adversely affecting their business, combined with their AI-driven recommendation models, has reassured investors. This strategic focus on AI has allowed Meta to outperform expectations in the digital ad space, which Beck believes is a key factor in the stock’s recent success.
Looking ahead, Beck expressed interest in the developments expected from Meta’s Connect Conference, particularly regarding new products and innovations. He noted that CEO Mark Zuckerberg has been enthusiastic about the potential of new smart glasses, which he believes could become one of the largest products in the company’s history. The integration of Meta’s AI assistance into these glasses is anticipated to enhance their functionality and user experience, potentially driving further consumer interest.
Beck also discussed the financial implications of the Reality Labs division, which has been a significant cost center for Meta, impacting earnings per share (EPS). If the smart glasses gain traction and move towards breaking even, it could substantially improve Meta’s financial outlook. This shift would not only enhance the company’s EPS but also make Meta’s valuation appear more attractive compared to the broader market.
Finally, Beck analyzed the current valuation metrics for Meta, noting that the stock is trading at just over 20 times earnings for 2026. If the losses from Reality Labs were excluded, this multiple could decrease to around 17, making Meta’s stock more appealing relative to the S&P 500. Overall, Beck’s insights suggest that if Meta can successfully leverage its AI capabilities and new product offerings, it could lead to significant growth and a more favorable market position.