Facebook parent company Meta Platforms could see a "massive financial windfall" from generative AI-powered chatbots on its WhatsApp messaging service, according to a new analyst report. Meta stock was up in morning trading Wednesday.
"We believe GenAI will allow WhatsApp (and eventually Instagram and Facebook) chatbots to evolve into 'intelligent conversations' or more personal conversation with businesses," William Blair analyst Ralph Schackart told clients Tuesday. "These chatbots will likely evolve from customer service agents to top-of-funnel assistants to help drive e-commerce sales."
The company is offering GenAI tools to businesses on WhatsApp in a testing phase in English speaking countries, the analyst note said. Meta currently charges businesses 2.5 cents per conversation every 24 hours. But Schackart said there is "runway" to increase pricing as customers get more used to interacting with chatbots.
With an estimated 2.7 billion users on WhatsApp, Schackart estimates that generative AI chatbots could deliver incremental revenue of $16.6 billion in 2025 and up to $45 billion by 2030. Meta is projected to post $186.7 billion in 2025 sales by analysts on average, according to FactSet.
Even before that potential boost, Schackart said Meta's stock price could reach 750 within 12 months. He rates the stock as outperform.
On the stock market today, Meta stock is up 3% at 614.31. Stocks are broadly rallying on new data that core price pressures eased more than expected in December.
Meta Stock: Business AI Push
The bullish view from William Blair comes as Meta is planning a broader push into offering AI services to businesses. The company in November hired former Salesforce AI CEO Clara Shih to lead a Business AI group at Meta.
WhatsApp – which Meta acquired for $19 billion in 2014 – figures to be a central part of those efforts. Meta already offers click-to-message ads on Instagram and Facebook that launch conversation between users and businesses either on WhatsApp or its Messenger app. Revenue from that style of ad exceeded $10 billion annually in 2023, Chief Executive Mark Zuckerberg told analysts that year.
Meta, meanwhile, 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.
Meta Stock Retakes Buy Point
With its gains Wednesday, Meta stock retook a 602.95 flat base buy point, according to MarketSurge. Shares fell below that level, as well as Meta's 21-day moving average, with a 2.3% slide on Tuesday.
Meta is also an IBD Leaderboard stock.
The social media stock has an IBD Composite Rating of 98 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
