Meta Connect event laid the 'AI foundation' for the company, Wall Street says
Kira-Yan
Meta Platforms (NASDAQ:META) kicked off its Connect developer event yesterday with a keynote address that was heavy on artificial intelligence and new products, leaving Wall Street firms impressed.
Morgan Stanley analyst Brian Nowak, who has an overweight rating and $375 price target on meta (META), said the tech advancements were "impressive" and the AI advancements should also create new use cases and monetization opportunities. 
"These announcements speak to META's ability to invest in AI while leveraging its leading data and distribution channels to create new potential engagement and revenue drivers," Nowak wrote.
Meta (META) shares were fractionally higher in pre-market trading on Thursday.
Goldman Sachs analyst Eric Sheridan reiterated his buy rating and $384 price target on Meta (META) after the event, pointing out that the Quest 3, Meta's first mixed-reality headset, is aimed at keeping the company's leadership in the category, even as Apple (AAPL) gets ready to launch the Vision Pro early next year.
But perhaps more importantly, the company's advancements in generative AI, including AI personalities via chatbots, its new text-to-image generation model (known as Emu), increased access to its Llama large language model via a partnership with Amazon (AMZN) and other announcements are setting the company up for the future. 
"Specific to AI, we expect generative AI to remain an important theme across our coverage universe (as it produces large-scale shifts in both enterprise and consumer behavior) and increasingly see META as a leader in the space given: its rapidly evolving AI capabilities (Llama 2, Emu, etc.); depth of resources and access to large-scale compute power (for the development & deployment of these models) and a scaled global user base across a number of platforms and utilities by which to introduce new AI features and gain consumer adoption," Sheridan wrote in a note to clients.
Baird analyst Colin Sebastian, who has an outperform rating on Meta (META), said he was "impressed" by the integration of generative AI assistants into the company's apps and believes it should expand the use case and time spent, while also potentially offering new ways to generate revenue. 
Sebastian also praised the integration with Microsoft (MSFT) to bring current real-time web information via Microsoft's Bing browser, which he labeled as "significant."
"We believe this is a significant, but largely anticipated announcement, and likely will fuel some speculation around search-oriented monetization, and potentially more competition for Google," Sebastian wrote.
Sebastian also weighed in on the new hardware, noting that the $500 price point for the Quest 3 "probably" means Meta (META) is subsidizing the units, but it is likely another step towards the metaverse. He estimates between $3B and $4B in revenue from the Quest 3 over the next 12 months.

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