Meta Platforms (META) announced yesterday that it is closing its Augmented Reality (AR) studio, Meta Spark, on January 14, 2025, disappointing third-party creators using the platform. Independent creators will not be allowed to leverage the Meta Spark platform to create customized effects on apps, including Instagram, Facebook, and WhatsApp. Meta said that it seeks to enhance investments and focus on artificial intelligence (AI) tools and venues.
Here’s How Meta’s Decision Impacts Creators
From January 14, all the filters, masks, and 3D special effects created by third-party AR developers will be removed from Meta Spark. However, Meta will continue to host its in-house special effects and AR content on its apps. The social media giant also said that existing reels and stories, which use third-party effects, will continue to be available. However, AR effects and files will be removed from Meta Spark Studio and Meta Spark Hub.
The news frustrated third-party creators as they depended heavily on Meta Spark to offer their special effects to customers. The creators will have to shift to other studio options such as Snap’s (SNAP) Snapchat Lens. Meta’s decision could drive AR developers to rival companies, thus posing a threat to the popularity of its apps.
Meanwhile, Meta has other important avenues up its sleeve. The Mark Zuckerberg-founded company is determined to focus on AI tools and its own large language model (LLM), Llama. It is also razor-focused on developing its metaverse projects.
Insights from TipRanks’ Bulls Say, Bears Say Tool
Meta Bulls are positive about the road ahead. According to TipRanks Bulls Say, Bears Say tool, analysts are encouraged by Meta’s growing revenues and solid earnings reported for Q2 FY24. Moreover, they are optimistic about Meta’s AI integration plans, product innovation, operating efficiencies, and global expansion plans.
On the other hand, Bears are concerned about Meta’s significant capital investments that could hamper margins and stiff competition from other social media platforms such as TikTok. Also, they are concerned that Meta’s Reality Labs division remains a drag as it continues to burn cash.
Is Meta a Good Investment?
With 39 Buys, three Holds, and one Sell recommendation, META stock commands a Strong Buy consensus rating on TipRanks. Also, the average Meta Platforms price target of $582.38 implies 12.2% upside potential from current levels. META shares have zoomed nearly 47% year to date.
