Meta stock remains a Citi top pick with $803 target amid ad tool improvements
Investing.com
Published Jul 15, 2025 06:44AM ET
Investing.com - Meta Platforms Inc. (NASDAQ:META) maintains its Buy rating and $803.00 price target at Citi, with analyst Ronald Josey reiterating the social media giant as a "Top-Pick" ahead of second-quarter earnings expected on July 30. The company's strong financial performance is reflected in its impressive 81.77% gross profit margins and robust revenue growth of 19.37% over the last twelve months.
Citi's tracking data shows Instagram Sponsored Reels ad load declined 100 basis points quarter-over-quarter to 24.9% in Q2 2025, marking the first quarterly decline since the firm began monitoring this metric in June 2022, though it remains up 340 basis points year-over-year.
Despite this quarterly decline in ad load, Citi attributes the change to Meta's newer AI advertising tools delivering more relevant personalized ads with higher conversion rates, specifically highlighting technologies including Andromeda, GEM, Lattice (OTC:LTTC), and Sequence Learning.
The research firm believes Meta is "well positioned to deliver better than expected results" in the upcoming earnings report, citing a strengthening broader online advertising environment as a contributing factor.
Citi will be watching for insights on Meta's Superintelligence Lab development during the earnings call, while maintaining that the company has "multiple growth catalysts ahead" to support its continued Buy recommendation. Based on InvestingPro 's Fair Value analysis, Meta appears slightly overvalued at current levels, though the platform identifies 14 additional key insights about the company's financial health and growth prospects.
In other recent news, Meta Platforms has been the focus of several key developments. Piper Sandler reiterated its Overweight rating on the company, highlighting anticipated third-quarter revenue guidance of approximately $47 billion, which would represent a 16% year-over-year growth. The firm also noted Meta's strong performance relative to peers and its ongoing investments in artificial intelligence, which have led to raised out-year estimates. Similarly, Citizens JMP maintained a Market Outperform rating, despite noting challenges with Meta's AI model, Llama, and expressing optimism about the company's potential to overcome these hurdles. In a related move, Meta has expanded its AI talent pool by hiring two more researchers from OpenAI, as part of CEO Mark Zuckerberg's strategy to strengthen the company's AI capabilities. Meanwhile, ByteDance, known for TikTok, is developing mixed reality goggles, signaling its continued interest in the AR and VR market despite previous setbacks. This project reflects a shift towards lighter-weight devices, aligning with industry trends. Additionally, the Kremlin has defended its wartime censorship measures amid the ongoing conflict with Ukraine, emphasizing the need for such actions in the current military situation.
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Written By: Investing.com
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