Ca$htag$: META Ads, Product Demand Back Stock's Sharp Rally

SPEAKER_1 (0:00)

Time now for our Cash Tag segment. For that, let's bring in our next guest, and that's Megan Brantley, Vice President of Research at LikeFolio with a status update on Meta Platforms. Now the stock is taking a step back today, but it's been gaining more and more conviction on Wall Street with analysts after analysts increasing their price target on Meta. You all have new sentiment data. What does that look like?

Megan Brantley (0:20)

Yeah, so Meta has been one that we've been tracking for a while where we were starting to see some bullish tailwinds, and the stock really hadn't caught up. Finally, as you mentioned, it has. I think shares are up about 36% off of those July lows and just about 6% off of highs. Certainly, investor sentiment has warmed up to this company at large. A lot of it, I think, really is related to the fact that Meta feels more like Apple at peak Apple than Apple does right now, if that makes sense from an innovation standpoint, from the products that it's bringing consumers, from the way that its technology works. And that's what we're seeing whenever we look across our different data fields. And I think what's really important, you know, we see a lot of talk about Muse and about its Muse Wonder AI, and all of these advancements and new products kind of feed its machine, which is ultimately advertising. And we have some unique insight into advertising as well. And when you look here to see, okay, how much interest is Meta gaining from advertisers? We have it leading all other peers, and we also have it accelerating. So when we look at those visits, you can see Meta Ads at the top up about 61 percent year over year. This is a pretty rapid acceleration, and it's pretty impressive because Meta is the Mindshare leader whenever you consider it versus all of these other peers. And whenever you think about just earlier this year, I think when we looked at this at the beginning of the year, around February, that number was up about 4 percent year over year. So Meta is doing a really good job of leveraging its AI to help advertisers develop better campaigns, and it's certainly gaining traction. And right now, at least, this drives about 98 percent of Meta's revenue. So for us, especially as we look at earnings looming in about a week or so, this is a really positive sign that not only is Meta releasing these kind of novel products, but the way that it's leveraging these advancements into its advertising ecosystem is really working.

SPEAKER_3 (2:22)

Megan, they've got the eyeballs, what, 3.6 billion daily active users across their platform. One of the things that they're trying to do is diversify the revenue streams, right? Most of it's advertising at this point. They're starting to charge for this Meta Muse platform.

It seems like it's gained real traction as far as your data goes, as far as what we've seen as far as numbers of downloads and the daily active users on those platforms. Do you guys see any data that basically says that people will pay for these agents? Because I just don't see that happening because this is going to be erased to zero, especially because the competition that you have from Anthropix Clawed, OpenAI, GROK from Tesla or SpaceX. I mean, it seems like this is going to be erased to the bottom. So you can start charging for these agents, but is that going to hold?

Megan Brantley (3:13)

You know, I think that the key differentiator that Meta has some of these other players don't have is that captive 3.6 billion daily active user base that it can kind of attract over. You know, right now, whenever you think about who's paying for these AI agents, it's really these kind of super AI users. You know, not your regular Joes and Janes on the street, but maybe if there's a way that they see that it can be useful on their own Facebook or Instagram as that gets integrated. Maybe if they buy a pair of glasses and ultimately the Muse agent is integrated onto those glasses. It becomes an easy upgrade that they're willing to say, you know what, I will pay for you to be able to handle all these things and potentially give a taste of what AI agents can actually do to someone who may not be AI native, if that makes sense. So I think that Meta is probably best position, better than anyone other than maybe Apple to kind of open that door for just regular users to see what an AI agent could be like. And that's kind of, you know, when we look long-term at Meta as you mentioned, you know, right now, advertising is 98% of revenue, but they're building out into these business agents and other areas to kind of capture subscription. And even if they get minor traction here, whenever you're considering the massive user base, that's a pretty, pretty expansive opportunity.