Morgan Stanley: Meta unlocks WhatsApp monetization, estimated annual revenue could exceed $6 billion

According to Zhitong Finance APP, Morgan Stanley published a research report stating that Meta (META.US) recently announced plans to introduce advertising features in the "Status" tab of WhatsApp. This move is expected to open up significant new revenue growth paths for the company, maintaining an "overweight" rating on the stock with a target price of $650. It is understood that Meta announced this week that it will launch ads in the "Status" tab of WhatsApp. These "status ads" will only appear within that tab and will not be displayed in users' call and message interfaces, nor will they access users' chat content. Currently, the "Status" tab of WhatsApp has approximately 1.5 billion daily active users, and the ad format is similar to Instagram's "Stories." Additionally, Meta plans to commercialize the "Channels" feature on the platform, including launching "Promoted Channels" and "Channel Subscriptions." Although the company has not yet charged for channel subscriptions in the short term, reports indicate that the company ultimately plans to share revenue from subscriptions. Morgan Stanley pointed out in the report that although WhatsApp has a large user base, about 95% of users are located outside the United States (where ad monetization rates are lower), and users spend relatively little time in the "Status" tab (most of their time is spent on calls and messages). However, with Meta's strong data support and advertising tools, the WhatsApp advertising business still has considerable growth potential. The firm predicts that under base case assumptions, if users spend a high single-digit percentage of their total WhatsApp usage time in the "Status" tab (approximately 2-4 minutes per day), and the ad monetization rate reaches or slightly exceeds Pinterest's (PINS.US) international monetization level, WhatsApp's annual ad revenue could reach $3-5 billion, contributing 1.5%-2% to Meta's revenue in 2026. In an optimistic scenario, if the usage time in the "Status" tab reaches 12% and the ad monetization rate reaches Facebook's level, annual revenue could exceed $6 billion, contributing 3% to Meta's revenue in 2026. Furthermore, Morgan Stanley believes that while the WhatsApp advertising business has limited short-term impact on Meta's overall revenue, its significance lies in providing Meta with more long-term growth options, including expansion into business messaging, search, devices, and wearables. The firm believes that more stable revenue and cash flow growth will drive long-term profitability and valuation improvement