Meta Platforms kicks off its biggest annual conference on Wednesday. Meta stock analysts will be listening for updates on the Facebook parent company's dual push to be a leader in artificial intelligence and the virtual reality metaverse.
The annual two-day Connect developer conference starts on Wednesday. Chief Executive Mark Zuckerberg will give a keynote presentation at 1 p.m. ET tomorrow, where he is expected to provide more details on Meta's artificial intelligence and metaverse visions. The talk will be streamed live on Meta's Connect website. It also, naturally, will be available to watch in Meta's Horizon Worlds virtual reality platform.
Here's what Meta stock analysts will be watching from the conference:
Balancing AI And The Metaverse
Meta stock has gained nearly 60% this year, building off a 197% gain in 2023. The company's shares have bounced back mostly thanks to the renewed strength of Meta's massive digital advertising business. But Meta has also invested significantly in its generative AI capabilities. Zuckerberg's tech giant has launched powerful large language models and integrated a generative AI chatbot across its massive Family of Apps business, including Facebook and Instagram.
Investors increasingly see Meta as an AI winner, but have generally been less excited about the ongoing investments into the so-called metaverse. While full-on virtual reality headsets such as Meta's Quest 3 have yet to go mainstream, the company does have a fast-growing surprise hit in its Ray-Ban-branded smart glasses.
Announcements could include a cheaper version of Meta's lead virtual reality headset, the Quest 3. Meta launched Quest 3 at last year's Connect conference.
Focus On Augmented Reality
While Zuckerberg's initial metaverse vision focused on fully immersive virtual reality, analysts expect this week's event to further Meta's push toward augmented reality. The company's Ray-Ban smartglasses, for example, can take pictures and answer questions about a user's surroundings, making them different from fully immersive headsets.
BofA Securities analyst Justin Post wrote to clients Monday that he expects Connect to focus on augmented reality and artificial intelligence. That could include the reveal of next-generation augmented reality glasses and more advanced AI chat features.
One question heading into the event, Post wrote: Can Meta's augmented reality glasses supply a "wow factor and suitable pricing that could drive rapid adoption?"
Another question, he added, is whether there is "enough developer momentum around AR/VR that could drive the ecosystem forward?"
Investors may also be watching for signs of "cost rationalization" for virtual reality hardware and 2025 capital expenditures, Post wrote. Meta expects to spend $37 billion to $40 billion in capital expenditures this year.
Separately, Monness Crespi Hardt analyst Brian White told clients Tuesday he expects updates on Meta's AI push, including its chatbot and Llama large language model.
"Meta AI was one of the more notable announcements at last year's Meta Connect, described as 'an advanced conversational assistant.' This week, we expect an update on Meta AI with Meta unveiling new capabilities and experiences," White wrote to clients.
White rates Meta stock a buy.
Meta Stock Is Near A Buy Zone
Meanwhile, Meta was the IBD Stock of the Day on Friday. Meta is also included in the IBD 50 premium stock list.
The Facebook parent company has rallied back to new highs after a slump in July.
Meta retook a 542.81 buy point on Sept. 19, as identified by MarketSurge. Shares gained 7% last week. On Monday, the stock became slightly extended beyond a 5% buy range that extends up to 569.95, according to MarketSurge. However, shares are down 0.5% at 561.87 in recent action on the stock market today.
Meta stock has a 96 Composite Rating out of a best-possible 99. The tech giant has a 93 Relative Strength Rating and a strong 96 EPS Rating.
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