Meta Platforms ad revenue could return to modest growth by end of 2023 - Edward Jones

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Meta Platforms ad revenue could return to modest growth by end of 2023 - Edward Jones
Credit: © Reuters.

By Sam Boughedda

Meta Platforms (NASDAQ: META ) was upgraded to Buy from Hold by Edward Jones analysts on Monday after the tech giant reduced its expense expectations.

"Meta is notably reducing its previous expense expectations, addressing our concerns about especially heavy spending on its metaverse virtual-reality initiative," said analysts.

They noted that Meta announced two rounds of employee layoffs and initiatives to improve its operating efficiency.

"We think that Meta's ad revenue could stabilize and return to modest growth by the end of 2023 as the online ad market starts to recover, it improves ad targeting on Apple devices via its artificial intelligence (AI) development efforts, and the Reels feature gains additional traction with advertisers," analysts added.

"Meta has 3.7 billion users across its products, and its user base continues to grow. This sizable platform enables it to provide valuable analytics and services to advertisers. We think that Meta's technology expertise will help it offset recent Apple operating-system (iOS) changes that have impacted ad targeting and will help advertisers transition to the Reels feature."

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