Citigroup's report pointed out that Meta (META.US)'s third-quarter advertising revenue increased by 20% annually at a fixed exchange rate, with ad impressions up by 7% and prices up by 11%, indicating the company's continued market share gain in the overall advertising budget. During the quarter, Meta's AI recommendation engine increased user engagement on Instagram and Facebook, driving usage growth, reflecting the company's ROI in AI, and the bank believes that the field is still in its early stages.

In terms of monetization capabilities, the bank pointed out that over 1 million Meta advertising customers are using its generative AI tools to increase conversion revenue. Although the company's capital expenditures are expected to increase next year, the bank believes that Meta's 'efficiency year' is still in its early stages, as it focuses on short-term, medium-term, and long-term growth opportunities. The bank reiterated a 'buy' rating on Meta, raising the target price from $645 to $705.