Why Meta Platforms Stock Skyrocketed Today
Key Points
Meta Connect, the company's annual two-day AI event, kicks off this week.
Investors will primarily be focused on the adoption of its recently launched Muse AI agent.
Meta stock is attractively priced.
Shares of Meta Platforms (NASDAQ: META) charged sharply higher Monday morning, gaining as much as 7.6%. As of 11:22 a.m. ET, the stock was still up 7.1%.
The catalyst that sent the social media and artificial intelligence (AI) specialist higher was bullish commentary from Wall Street regarding the company's recently launched AI agent.
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A new revenue stream?
Wells Fargo analyst Ken Gawrelski raised its price target on Meta to $796, up from $640, while maintaining an overweight (buy) rating on the shares. That represents potential upside of 20% compared to Friday's closing price.
The analyst made the move ahead of Meta Connect -- the annual two-day event that kicks off on Wednesday -- which the company uses to showcase its latest advancements in AI. Meta will likely highlight the adoption of Muse, the company's personal AI agent that can perform tasks, rather than just answer questions. Meta unveiled Muse earlier this month, with a free version and paid tiers costing $20 and $100 per month, depending on usage.
Investors will be watching closely to see whether Meta provides usage updates on its latest release and whether that translates into an ongoing revenue stream. The company's focus on direct-to-consumer applications differs from many of its rivals, who focus on enterprise tools made available via their cloud computing services.
Meta's legal troubles have weighed on the stock, as investors assess the long-term implications of the company's recent $18 billion legal settlement.
Even after today's rally, Meta is selling for less than 27 times earnings, an attractive price for a company in the thick of the AI revolution.
Danny Vena, CPA has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.