Meta Stock Hits Three-Month High After AI Ad Automation Report; Advertising Stocks Fall
Facebook parent MetaPlatforms (META) believes its artificial intelligence tools could soon fully automate the process of creating advertising campaigns, according to a Wall Street Journal report. The news was viewed as positive for Meta stock but could be bad news for some major advertising firms.
Meta aims to offer a tool that "enable brands to fully create and target ads using artificial intelligence by the end of next year," the Wall Street Journal reported, citing unnamed sources. Companies would need to submit a photo of their product with a budget and then let Meta's AI advertising handle the rest, the report said.
↑X NOW PLAYINGFight Over User Data Opens New Generative AI BattlegroundMeta Chief Executive Mark Zuckerberg has alluded to this plan before. "Over the long-term, advertisers will basically just be able to tell us a business objective and a budget and we're going to go do the rest for them," Zuckerberg said on a conference call with analysts last August, following the company's second-quarter earnings report.
Meta is investing billions in building data centers to power the training and operation of its custom AI models, which it is publishing for developers to use as open-source code. A big part of the payback that Meta expects from that investment is improved user engagement and stronger advertising tools for Facebook, Instagram and its other apps.
Advertising provides nearly all of Meta's revenue.
Meta's AI tools could allow advertisers to personalize ads based on location and other factors, according to the Wall Street Journal report. The report noted, however, that some large brands have been resistant to providing Meta further control over their ad efforts.
Meta Stock: Cup-With-Handle Buy Point
On the stock market today, Meta stock gained more than 3.5% to close at 670.90. Meanwhile, shares of large advertising agencies fell. Omnicom Group (OMC) lost 4% to close at 70.44. WPP Group (WPP) shed 2.45% to close at 39.42. Interpublic Group (IPG) lost 3.2% to close at 22.87.
With Monday's gains, Meta stock pushed past a 662.67 cup-with-handle buy point, according to the IBD MarketSurge pattern recognition tool. Shares also reached their highest point since March 3.
Meanwhile, Meta stock rallied 18% in May after slumping 5% in April, 14% in March and 3% in February. Strong first quarter results and the 90-day pause for President Donald Trump's tariffs on good from China helped ease some investor concerns.
While still below highs from mid-February, Meta's shares are ahead 13.5% overall in 2025. That is the best overall year-to-date gain among the Magnificent Seven stocks.
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