Meta Platforms has hired Salesforce's former AI boss to lead a new business. A Meta stock analyst called the move a "mega AI hire."
Clara Shih announced on LinkedIn late Tuesday that she will lead a new Business AI group at Meta that will "make cutting-edge AI accessible to every business." Shih was formerly the CEO of Salesforce AI, where she oversaw artificial intelligence efforts across the enterprise technology company. Shih also wrote a book called "The Facebook Era," published in 2009.
Analysts with Jefferies were bullish about the hire and the formation of Business AI Group.
The move represents "a big step forward in Meta's push to monetize its AI with businesses and enterprises," wrote Jefferies analyst Brent Thill in a client note late Tuesday.
"We think Clara's experience at CRM building Agentforce will be advantageous in Meta's efforts to build Gen AI tools & agents for the more than 200 million businesses that leverage WhatsApp, Instagram and Facebook each month."
Jefferies rates Meta stock a buy with a price target of 675.
On the stock market today, Meta stock closed a fraction higher at 565.52.
Meta's AI Push
Meta has invested billions in developing its own AI large language model, called Llama, which it describes as open-source available for other developers to use. Llama powers the Meta.ai chatbot, which the company has integrated into Facebook, Instagram and its other apps. Unlike Google parent company Alphabet or ChatGPT creator OpenAI, Meta does not currently charge for access to a premium version of its AI chatbot.
Meta Chief Executive Mark Zuckerberg has told investors that the company will get a return on its AI investments through improved engagement on its apps. During a call with analysts in late July, he said that could include AI agents for businesses, as well as fully automated advertising plans.
"Over the long-term, advertisers will basically just be able to tell us a business objective and a budget and we're going to go do the rest for them," Zuckerberg said on the company's second-quarter earnings call.
Thill, the Jefferies analyst, said Shih's experience at Salesforce could help Meta's effort to build generative AI tools and agents for businesses on WhatsApp.
"Meta has relied on other software companies like Amazon, Microsoft to sell its software into the enterprise," Thill wrote. "We believe this hiring and new business group could be a big first step in Meta's plans to directly sell into the enterprise and monetize Llamas Open Source traction."
Meta Stock: Up 60% This Year
Meta stock has advanced 60% year-to-date. But a slump in recent weeks has pushed shares below both their 21-day and 50-day moving averages. There are some concerns from investors about what Donald Trump's second presidential term will mean for the social media giant.
Meta has formed a flat base pattern with a buy point of 602.95, according to MarketSurge pattern recognition.
The IBD Stock Checkup tool shows Meta has an IBD Composite Rating of 95 out of 99. The score places Meta in the top 5% of stocks by key performance metrics and technical strength tracked by IBD.
