FB Stock: Facebook Inc’s Next Move Could Send The Shares Soaring

FB stockThis Could Be Huge For FB Stock

Facebook Inc (NASDAQ:FB) stock continues moving upwards consistently as the company posts impressive growth and launches new products and services.

Following the success of its “Instagram Stories” feature, Facebook has moved on to meeting the challenges of its just-launched “Marketplace” feature. However, the social networking giant stays focused on the next big thing in computing, which is sure to take the FB stock much higher.

At the third Oculus Connect Conference on Thursday, Facebook CEO Mark Zuckerberg showed a new Oculus VR, LLC prototype standalone headset. The distinct feature of this standalone VR headset is its positional tracking technology which allows the headset to understand where it is in physical space and adjust the onscreen content accordingly. (Source: “Facebook’s Oculus is building another virtual reality headset,” Recode, October 6, 2016.)

Mark Zuckerberg is betting big on the potential of virtual reality (VR). It may take some time for the product to hit the market, but what is of significance is that Facebook is trying to bring VR to the masses.

Oculus shall build this headset for the middle range of the market, which has huge untapped potential. It will be less expensive than Oculus VR’s “Oculus Rift,”  Sony Corp (ADR)’s (NYSE:SNE) “Playstation VR,” and HTC Corporation’s “Vive,” but likely to be better than Samsung Electronics Co Ltd’s “Samsung Gear VR.” The device would not need any cables for connecting it with a personal computer (PC) or a smartphone. If Facebook becomes the dominant player in this market segment, it will be a big boost to Facebook stock.

FB stock has posted gains of about 38% over the last one year, as compared to about 12% by the S&P 500. Analysts have been bullish about Facebook stock. Wedbush’s view is that Facebook stands to gain from higher monetization driven by continued investments and user engagement.(Source: “Some FANGs Are Sharper Than Others,” Benzinga, October 4, 2016.)

Moreover, the ad platforms from its “Messenger,” “WhatsApp,” and “Instagram” services would drive margins higher in the coming years. Also, the VR platform is expected to change the communication methods of users. (Source: Ibid.)

However, Facebook faces increased competition from other VR players. Sony Corp plans to release a less-expensive headset next week that connects to its “PlayStation 4” video game console, and Google’s (Alphabet Inc (NASDAQ:GOOG)) “DayDream View” is also coming soon.

As investors look forward to the third-quarter earnings report on November 2, expectations shall be quite high. However, if they gain more clarity about how the company plans to go ahead with its VR strategy and plans to tackle the competition, it shall keep FB stock buoyant.