Facebook Instagram Reels monetization, as well as the adaptation of the Facebook Shops service by retailers, are in the focus of investors' attention in the short and medium term in Meta securities.
We continue to positively assess the prospects of the social network, maintaining the target price for its shares at $ 420. The driver of growth for them can be the publication of reports for the fourth quarter, in which the company will disclose the results of marginality of the main (advertising) business unit for the first time. Detailed information will allow investors to reassess the value of the corporation.
In the long term, the focus is shifting to the creation and development of the metaverse as the next generation of social networks and the Internet in general.
The idea of creating a metaverse looks promising. The goal of the corporation is to ensure a significant gap from competitors. The volume of this market may exceed $1 trillion.
The metaverse is a constantly functioning virtual 3D space in which people interact with each other, as well as with various digital objects. Although there is disagreement about what exactly can be defined as a metaverse. These differences of opinion were clearly manifested at the recent CES 2022 exhibition in Las Vegas. Its participants, however, were unanimous in the fact that the development of the idea of the metaverse provides significant business opportunities.
For Meta, there are two main directions - the sale of VR/AR gadgets and the placement of digital advertising in the metaverse. In our opinion, the success of Meta's new beginnings directly depends on the emergence of a solution that will integrate the metaverse into the real world with the priority of using AR technologies, instead of creating a separate digital world, for interaction with which a constant immersion in virtual reality (VR) is necessary.
Given the rapid development of AR/VR technologies, we consider the idea of creating a Meta universe by Meta to be realistic, since it is a leader in the AR/VR industry, has the necessary competencies, and its services are used by 3.58 billion people every month. Such a large audience provides the company with undeniable advantages for development in the direction of the metaverse. From a financial point of view, the business looks very strong, its operating margin remains high, although Meta estimates a negative impact on profit of $10 billion per year due to investments in the strategically significant Facebook Reality Labs division.