Meta stock has strong upside potential due to upcoming AI product launches (Hatch, Watermelon), robust advertising revenue growth, and currently low market expectations.

Five days ago, we posted a video titled "Why Meta's stock is about to skyrocket." That was on August 28 when Meta's stock closed at around 577. The stock has risen 7 % since then in just the last five days, and let's not forget we were busy with the weekend.

So, what happens in Meta? Well, senior management is starting to change its mind about Meta, and some of the good news coming from Meta might be better than expected. But let's be clear, Meta's historical volatility is currently low . It's below average, which is a good sign.

There is a risk that the enthusiasm for the stock is misplaced, because the products they will offer may not generate profits. However, there are many possible reasons for optimism.

If you go to our " AI for Stocks" tab, I will provide you with an updated upside price target for this stock. However, if you go to our " AI for Stocks" tab, you will find in the Course Membership section a fair value of approximately $1100 for this stock.

In fact , I think the projections here underestimate the true potential growth rate of some of these new Meta products. Additionally, if you scroll down a little in the Session Membership section, you will find the MetaTrader historical volatility chart.

This is very important because it indicates that historical volatility is currently at its lowest point, which is the level at which buying options is preferred.

First and foremost, we have already touched on the fact that Meta is facing this major catalyst related to the lawsuits, and the settlement it reached regarding the time restrictions imposed on young people.

We also discussed Meta's potential to generate profit from some of its artificial intelligence technologies .

We also have the potential to profit from computing strategically if Meta gets excellent deals , right? Press reports indicate that Meta may launch its own consumer-oriented AI agent, called Hatch, in early September.

It is expected to cost around $199 per month in the top category.

Look at this. If you move here, you will find that Meta is moving to Slack because it claims it is better for AI agents. And I did that in conjunction with the launch of this plan.

Three months ago, Meta began selling a subscription to access its AI-powered chatbot for $7.99 a month. Information now indicates that this price may rise to $199 per month.

Meta plans to launch its AI agent platform "Hatch" in the coming weeks, followed by its "Watermelon Frontier" platform in October.

So, we have strong catalysts for meta-analysis, which the markets may be paying attention to, but I don't think so. "Hatch" is part of Zuckerberg's ambitions to profit from the company's huge investments in artificial intelligence and diversify its sources of income away from advertising. This is extremely important .

I think Meta pays less than Anthropic would pay when it goes public , but in return it gets a completely profitable advertising sector.

While Meta is valued at approximately $1.5 trillion, Anthropic is likely to go public at a value of $2 billion. Anthropic does not have the profitable core advertising business that Meta does.

Therefore, if Meta were to release a product that competes with Anthropic, such as its own version of Open Claw, many believe that this could be a game-changer for Meta.

But the new product may not be of the same quality, and may fail. who knows? Previous information suggests that Meta may charge up to $199 for a premium monthly subscription to this product, which includes higher usage limits.

Hatch may be trained to access sites such as DoorDash, Etsy, Reddit, Yelp, and Outlook.

Based on prototypes, the platform will include a customizable dashboard to showcase tools and skills created by users, such as fitness trackers or travel plans, and is expected to launch in late August or early September.

Well, since late August has passed and we are now in early September, we are in the perfect period for that. Meta is also preparing to launch its platform on WhatsApp that will allow users to integrate other AI agents directly with the chatbot .

This is very similar to what Slack does, which Meta currently uses.

This is useful because it likely means, "If you can get people to use interactive AI directly on your platform, you will gain more control." I believe that Meta, despite using Slack and moving away from Google Chat , is moving towards using Slack to build a platform similar to the one Slack built for Meta agents.

I almost think they are infiltrating in some way. It's as if they are saying, " Let's use it until all our employees get used to its advantages, and then let's make something similar."

In any case, considering some of the other arguments here, Meta is also accelerating its plans to launch its next flagship model to compete with Open AI and Anthropic. This is in addition to the open weight models that are still being developed rapidly.

Therefore, they want a closed-weight strategy to compete with China, or rather, an open-weight strategy to compete with China, as well as closed-weight models to compete with open AI and human technologies.

If Facebook could provide a more user-friendly version for creating bots like the Grok bot, that would be helpful. Facebook is attracting many companies thanks to its growing marketing mechanism .

This mechanism is extremely important , and we have talked about it previously. In short, you advertise to people browsing the site, showing them new products that are being advertised, but an AI-powered chatbot can answer questions about the same advertised products .

But you also have to add that it is small and medium-sized businesses that advertise, and they are present on the Facebook platform. Of course, not just Facebook, but also Instagram, WhatsApp, or others.

Now you have a catalyst for lawsuits, and a catalyst for making a profit, right ? Well, this is a motivating factor for profit. Then on top of all that, you have the watermelon, which, as you know , I wouldn't pin much hope on its advanced levels.

But you also have a hatch. As you know, this technique is called "Hatch," I don't know exactly, but I think it will range between 49 and 199, if I had to guess, something like that .

Then there is the accompanying " advertising wheel" factor . In addition to the " advertising wheel" we just mentioned. So, these are some of the great catalysts that will affect Meta stock.

And of course, what risks does this company face? First, they say that Meta may launch a consumer-oriented "Hatch" . Hatch operates through its own virtual machine, and can browse websites and navigate between different user interfaces to perform independent tasks for users, enabling it to do activities such as online shopping , restaurant reservations, filling out forms, sending emails, communicating via text messages, and it adapts over time, etc.

In addition to the launch of " Watermelon" in October. Consumer-oriented AI adoption is still in its early stages, and Hatch needs to be effective and differentiated from OpenAI and Gemini.

In other words, it needs to be better. It needs to be easier to use, more useful, and build more trust, which could be a weakness for Meta.

And of course, you should make it accessible to everyone through a suitable pricing model .

If Meta can achieve all of that, Bank of America is very optimistic about it. They believe that the use of artificial intelligence in Meta is currently very limited compared to GPT and Gemini, and that the general attitude towards Meta is very cautious.

This is actually a rather positive indicator on the list of catalysts, because if we add low expectations, low expectations plus low volatility, we will find more positive catalysts.

Now let's look at the leading issues. This is the cycle or wheel we were talking about.

What we do know is that Google's advertising revenue for the Meta service rose by 32.9% in the three months ending in March. Therefore , advertising revenues received a strong boost.

One of the downsides of Meta is its current low costs. Its spending on research and development increased by 67%, while its revenues increased by only 27.9%. It is true that it is still making huge profits, but its net income has decreased from 18 billion to 15.8 billion.

Therefore, it is time for Meta to prove its ability to generate a return on investment. Otherwise, the sell-off we have seen in Meta stock is justified because they are unable to show a return on investment.

Here you can see the meta arrow. It was within this price range. I believe the lowest level for the stock is 544. This is the lowest level the stock reached on the day of Leopold's liquidation.

I think that once we break through this downtrend here, which I think we will break through strongly, the stock price will soon be 828, but that is not my final prediction for this company.

So, my expectations for this company, based on earnings per share,

Now let's move on to the course subscribers page on the Meta platform, and see what we have. These are the current forecasts for Meta platforms. I have more optimistic expectations, which I will include on Kevin's notes page here.

Look at this. I want you to notice this. Current growth estimates indicate only 8.52% for Meta next year, i.e., the year ending in December 2027. This is very low. I don't know the reason, but these are Wall Street's current estimates for earnings per share growth.

Perhaps because they anticipate an increase in capital spending, an increase in spending on research and development, the kind of excessive spending that is attributed to Zouk.

But they have cash flow, unlike companies like OpenAI and Anthropic. I mean, that will be determined later, given that this company is public while they are not.

In any case, this seems too low to me, and I think this is a mistake. When I look at Meta's price-to-growth (PEG) ratio right now, I see it's only 1.12%. The average forecast for four years, including 8.52%, is 15.6% growth.

If we raise this to 20%, which I think is realistic if they start to profit from genetic AI and some other AI subscriptions, they will be very successful, and I will show you the price shortly. The target price may be much higher.

But I want you to see this before I finish Bernstein's article. Look here. This is an article from Morgan Stanley. Morgan Stanley's article on Meta. Could this move be a powerful springboard for Meta product innovations, as happened with Google last year?

Do you remember last year when we witnessed a special Gemini moment? We may witness a Gemini moment similar to Meta's.

It is very likely that this model will fail, and then Meta will bear the burden of the large expenditure. If these low predictions are correct, and Hatch is bad, what alternative solution do they have?

Let's assume Hatch is bad. The advertising wheel will keep turning. The low expectations will prove to be correct. Low trading volume will remain low, that's okay. Watermelon, it doesn't matter.

It will also fail. What is the alternative solution? Here it is, my dear. Making a profit from computing. In other words, if the strategy of monetizing AI using models and software fails, they can generate revenue through AI advertising improvements, which we will discuss in more detail later, but they can also sell excess computing power to Anthropic and OpenAI.

In my opinion, the current share price does not reflect any of these options. Well, this means that the current share price is high, and this may be a conservative estimate, because after gaining momentum, the price may rise even more.

But in my opinion, this sets the target price for the stock at around $1867, which is three times the current price. This makes the company worth about $4.5 trillion, roughly the same level as Google, Apple and Nvidia right now.

Therefore, the value of all these companies is very high. Clearly, the problem lies in the debt. Off-balance-sheet debt is a potential risk, as reported by Nikkei. Many of them involve risks that can be cancelled.

Therefore, there is a risk related to cancelable off-balance-sheet debt, data center partnerships such as Blue Awl Data Center, and others. So, there are still some risks. This is not a risk-free process.

Making a profit from computing will be crucial to justifying these outstanding debts.

But let's look at another way Meta can profit from artificial intelligence. She's here. Good? I personally considered artificial intelligence a boon for advertising, but I hadn't thought this through.

Meta, the biggest winner in the field of artificial intelligence in digital advertising, has undoubtedly seen the greatest impact of AI on advertising growth, and is on track to overtake Google Search this year.

Remember that Google search is worth about $60 billion, while Meta ads are worth $55 billion. In any case, excluding other advertising revenues, including Google Maps and Gmail, we believe Meta has already caught up with Google Search.

But unlike research, where users explicitly state their intentions, such as buying toys for children, right? Meta must predict which content and ads users are most likely to engage with, making AI-driven improvements in content recommendations, targeting, and ad measurement more beneficial to Meta.

In other words, Meta has a greater opportunity to leverage artificial intelligence compared to Google in the field of advertising.

Now, I don't think Meta is the only advertising option available. Meta is suffering from negative cash flow and needs to prove the viability of investing in artificial intelligence, which it has not yet done.

By putting all this information together, we observe a unique enthusiasm for Meta technology, which may find its way into the public markets. These plans, as reported in sites such as "The Information" or "Business Insider," are considered a potential game-changer, or perhaps not.

I believe the minimum limit for the stock price to fall is still around 544. So, we are not too far from that limit. Obviously, in the event of an economic recession, everything will decline significantly, but I believe we are much closer to positive catalysts becoming a tangible reality than negative catalysts.

And we haven't even talked yet about how excited I am about Meta glasses. I've talked about this enough in other videos and Instagram stories.

So, this is my opinion on the potential rise of Meta stock, and why we think it may experience a boom.