Meta Platforms (META) could unlock a $100 billion opportunity through its AI chatbot services, significantly enhancing customer interaction for over 200 million businesses. An analyst predicts share prices may surge by 67% as businesses increasingly adopt these tools, with solid expectations for revenue growth driven by effective utilization of AI technology over the next few years.
Recent advancements in artificial intelligence (AI) are paving the way for significant financial advantages for businesses by enhancing productivity through AI assistance. Companies that develop large language models form the foundation of generative AI and are already reaping rewards. However, businesses that effectively integrate AI into their operations may emerge as the long-term victors in this evolving landscape.
One of the potential long-term beneficiaries is Meta Platforms (META), which could be harboring a $100 billion opportunity, as noted by Ralph Schackart, an analyst at William Blair. He believes Meta’s role in aiding businesses to connect with customers through AI technology will catalyze a remarkable increase in share value over the coming years.
Meta has been developing AI tools to enable companies to create their own chatbots for customer interactions, with an alpha version launched in September 2023. As they broaden access across the platform, Schackart foresees a huge opportunity. With over 200 million businesses using its apps, Meta has a vast market for these AI solutions.
These AI chatbots can alleviate customer service burdens and enhance sales processes. Schackart predicts that by 2030, businesses will leverage AI to facilitate an average of 1.6 conversations daily per WhatsApp user, translating into a potential revenue of $45 billion for Meta at a cost of $0.04 per conversation. Exploring revenue through auction pricing of chatbot interactions could yield over $100 billion.
In light of past challenges in monetizing advanced features through their WhatsApp Business Platform, leveraging ads on Facebook and Instagram for chatbot services might be more beneficial. This strategy could help Meta scale improvements, leading to enhanced results as more businesses adopt AI chatbots, making advertising avenues more lucrative.
The monetization strategy may involve a hybrid model, where initial conversations through click-to-message ads are free for the first 72 hours. Beyond that, businesses are likely willing to pay a higher fee for AI-driven conversations as they can sidestep employing human agents, optimizing their customer interaction processes.
For investors, this anticipated surge is notable. Meta, already a heavyweight with projected revenues soaring from $163 billion in 2024 to $186 billion in 2025, could see an additional $100 billion by 2030—an impressive boost. However, it’s essential to realize that substantial investments in AI, expected between $38 billion and $40 billion in 2024, will add depreciation costs affecting earnings over time.
With the high expenses tied to running AI applications across more than 3 billion users, part of Meta’s future investments will aim to minimize AI-related operational costs. Successfully unlocking this potential could lead to expanded profit margins, even with these investments factored in.
If the opportunity is as robust as estimated, the $100 billion additional revenue could prove invaluable for Meta, potentially elevating share prices by approximately 67% if the current valuation holds. Given that AI chatbots are but one of many revenue streams available, greater growth could occur before 2030, further enriching shareholder returns.
The rise of artificial intelligence (AI) represents a pivotal shift in how businesses operate, promising not only enhancement in efficiency but also unlocking significant revenue opportunities. The true winners will likely be those companies that harness AI not just for internal use but also to assist other businesses in improving their operations. As developments proliferate, identifying key players who can capitalize on these innovations becomes crucial.
Meta Platforms stands at the threshold of a potentially monumental financial shift driven by its advancements in AI technology. By leveraging its extensive user base and developing robust AI chatbot services, Meta could tap into a vast market. The expected rise in revenue could ignite further interest from investors, setting the stage for a remarkable transformation in share value as AI becomes integral to business interactions.
Original Source: www.fool.com
