AI to the Rescue: Morgan Stanley Foresees AI-Driven Content Unleashing Monetization Magic for Meta

Morgan Stanley analyst Brian Nowak reiterated an Overweight rating on Meta Platforms Inc META with a price target of $250.
The analyst sees benefitting from AI-driven enhancements across core FB and Instagram, leading to more stable multi-year revenue growth in an April 23 note titled "Meta Platforms Inc: How Can AI Drive Upside to Estimates and Key Catalysts Ahead."
He sees generative AI tools leading to more creative and personalized organic and paid content to drive engagement, conversion, and ad unit monetization higher.
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The analyst notes that every 3% increase in META CPMs and impressions would add ~6% to his FY25 EPS.
He sees several key META AI-based catalysts.
Stepping back from AI, he notes that near-term engagement trends remain positive, and his ad checks speak to advantage, plus driving incremental spending.
He expects META to report revenue towards the high end of its revenue guide, likely to flow through to an EBITDA and EPS beat vs. consensus.
Price Action: META shares traded lower by 2.05% at $208.34 on the last check Tuesday.