Meta Platforms (NASDAQ:META)-owned Instagram’s Reels algorithm appears to have gone haywire, as evidenced by malfunctions observed in accounts deliberately established by the Wall Street Journal to assess its recommendations.
In a test conducted by the Journal, dedicated accounts were set up to evaluate the Reels algorithm, focusing on young gymnasts and influencers. The outcomes were startling, as Instagram, intended to suggest videos based on individual interests, inadvertently exposed these test accounts to explicit content featuring children and adults, as well as advertisements from well-known U.S. brands. The report highlighted that a similar test was conducted by the Canadian Centre for Child Protection, yielding the same results, thereby negatively impacting Instagram’s reputation.
Instagram’s unsatisfactory recommendations and responses could adversely impact Meta’s business. The company recently stated that it is leveraging Artificial Intelligence (AI) systems to power its reels and ads. Moreover, Meta noted that AI-driven feed recommendations continue to grow engagement on its apps.
With this background, let’s look at the Street recommendations for Meta stock.
Is Meta a Buy or Sell Right Now?
Meta stock is a Buy right now based on analysts’ consensus rating. With 36 Buy and one Hold recommendations, Meta stock has a Strong Buy consensus rating. At the same time, the average META stock price target of $387.65 suggests an upside potential of 15.82%.
