Lede

Argus Research Senior Securities Analyst Joseph Bonner has praised Meta's cost-cutting measures and AI investments, stating that the moves are giving the market what it wants.

Summary

• Bonner upgraded Meta to a Buy with a price target of $270, noting that Meta's cost-cutting measures are working and should have a positive effect on the company's bottom-line.
• The 24% cut in expenses will save about $8 billion on their 2023 expense projections, which is a serious measure in a low revenue growth environment.
• Meta's efforts in AI have helped improve the company's operations, with a focus on getting past the Apple ad tracking issue through AI and increasing the ROI on advertising.
• The company has conducted several waves of layoffs, affecting 21,000 employees, over the last few months as part of its "year of efficiency" push as Meta prepares for a difficult macroeconomic future.
• Bonner's revenue expectations for Meta are muted in the near-term, as digital advertising is slow, but he believes a revenue recovery will happen later in the year.
• Meta shares are down about 3% over the last 12 months and up approximately 73% year-to-date.