Citigroup analysts shared their bullish take on two major Big Tech companies Friday.
Ronald Josey reiterated Meta Platforms Inc (NASDAQ: META) with a Buy and a $385 price target.
With Reels ad loads reaching 19% QTD vs. 17% in 2Q per Josey's proprietary tracking, coupled with newer ad units, greater advertiser demand, and what the analyst believes is an improving online advertising environment, he considers Meta is taking share of the broader online advertising market.
Josey's tracking suggests ad loads expanded to 18% in July, 19% in August, and ~20% in September, and given his view that the leading SFV platform ad load is closer to mid-20%, he believes there remains upside as engagement grows and Reels' Lo-Fi ad environment attracts more advertisers.
The analyst also opened a 90-day Positive Catalyst Watch ahead of Meta Connect on September 27, where he expects to hear more details about Meta's GenAI plans and results in late October.
Meta remains his top pick across the Internet sector and would be a buyer on any material pull-back in shares.
Tyler Radke reiterated a Buy rating on Microsoft Corp (NASDAQ: MSFT) with a $420 price target.
At a special media event on September 21, Microsoft announced more details around O365 and M365 Copilot with an enterprise GA date of November 1, sooner than investors expected but more consistent with his Envision takeaways last week.
MSFT also announced new updates across Windows (Win 11 version with Copilot available on September 26), Surface, Designer, and Search.
Radke found the focus on Designer (and potential CoPilot) intriguing, with MSFT launching a soft preview with a small group of consumers, potentially indicating more competition with Adobe (NASDAQ: ADBE).
The analyst also thinks mass personalization with Microsoft Shopping and M365 Chat are opportunities for greater advertiser engagement.
Overall, he views the announcements as an incremental positive with an open positive catalyst watch heading into year-end.
Price Actions: META shares traded higher by 2.11% at $301.97 on the last check Friday. MSFT shares traded lower by 0.33% at $318.48.