What happened
Meta Platforms (META -0.10%) kicked off its trading week on a positive note, with its stock rising by more than 2% on Monday. Several bullish notes from analysts, on the basis of the company's push into artificial intelligence (AI), tipped sentiment in the social media company's favor. Meta's share-price performance notably exceeded that of the S&P 500 index on the day, which crawled up by 0.3%.
So what
Several prognosticators updated their takes on Meta Platforms in the wake of the social media company's update late last week on its AI efforts. Last Thursday, management unveiled a set of new AI-harnessing tools and services for its advertisers.
Meta calls this collection the AI Sandbox, and at the moment it's a pilot program. In the company's words, it "will act as our testing playground for early versions of new tools and features, including generative AI-powered ad tools."
Several analysts liked the sound of that and wrote bullish new notes on Meta stock. One was Bank of America's Justin Post, who reiterated his buy recommendation on the company and his price target of $300 per share.
He wrote that the new AI offerings "could help build competitive moats and multi-year platform retention, addressing concerns around terminal value uncertainty."
Loop Capital analyst Rob Sanderson went a step further, upgrading his recommendation to buy from hold on Monday while raising his price target to $320. Sanderson wrote of "strong product-driven enhancements" that should boost the company's fundamentals.
Now what
AI is certainly exciting, ground-moving technology, particularly in the advertising space. However, we should remember that Meta isn't as AI-forward as other companies in the tech space, and it hasn't yet proven that it can leverage the technology to make a serious difference in its business. Some investor caution, then, is probably in order here.
