Meta Stock Is Moving Higher Monday: What's Going On?

Meta Platforms Inc META shares are trading higher Monday after the company announced that WhatsApp will show ads and offer paid subscriptions for the first time.

What Happened: Meta is set to begin displaying ads inside of its cross-platform messaging application WhatsApp, opening the company up to additional revenue.

The Facebook parent company, which has seen ads success on other platforms, will introduce ads in the “Updates” section of WhatsApp, which gets 1.5 billion visitors each day.

“We've been talking for years about how to build a business on WhatsApp in a way that doesn't interrupt personal chats, and we believe the Updates tab is the right place to introduce that,” Meta said on Monday.

Advertisers will be able to pay fees to promote ads on their WhatApp Channels, which will make ads stand out in the Updates tab of the platform. Advertisers will also be able to sell subscriptions. Meta plans to eventually take a 10% cut of subscription sales, according to Bloomberg.

The report indicates that the new ads initiative is aimed at expanding revenue streams in order to help fund the company’s AI investments, an area Meta continues to spend heavily in, including with its recent stake in Scale AI.

Ads on WhatsApp will not be nearly as targeted as Facebook and Instagram ads, which often use personal information and browsing history to deliver relevant ads. WhatApp ads are expected to be more broad and focus on a user’s location and Channels they follow on the app.

Ads are expected to start appearing on the WhatsApp platform on Monday for some users. The company said it will be rolling out ads slowly over the next several months.

Meta said at the end of April that it generated $41.39 billion in total advertising revenue during the first quarter, up from $35.65 billion in the first quarter of 2024. Ad impressions across its family of apps increased by 5% year-over-year and average price per ad jumped 10%.

META Price Action: Meta shares were up 2.51% at $700.03 at the time of publication Monday, according to Benzinga Pro.

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