Loop Capital sees “a much brighter revenue picture” ahead for Meta . The firm upgraded Meta shares to buy from hold in a Monday note. It said that, while expense rationalization was likely more of a “one-time driver,” it is bullish on the overall revenue outlook for the tech company. “Three significant headwinds to revenue (Apple ad tracking changes, foreign exchange and transition to Reels) are all cycling through and set to become tailwinds. Combined we estimate these pressures had around mid-teens percent headwind to revenue growth,” wrote analyst Rob Sanderson. Sanderson set his price target to $320, which implies shares rallying 36.7% from Friday’s close. The stock has almost doubled year to date, and they rose 1% in the premarket. META YTD mountain META in 2023 The analyst is particularly optimistic on the impact of Reels as part of Meta’s monetization opportunity. He noted that Meta’s Reels is now growing faster in the short-form video category than rival TikTok. “Competition from TikTok has been a major focus, but Meta has … [the] best-in-class infrastructure and adtech. Feedback from brand advertisers on Reels performance is increasingly positive and advertising products continue to evolve quickly,” said Sanderson. “We think Reels is likely to become another big flywheel for Meta and help to open large revenue opportunities in social commerce,” Sanderson added. “Meta is rapidly evolving its tools for creators and its advertising products. These are areas where Meta’s scale in infrastructure, adtech, reach and ecosystem provide a competitive advantage and better outcomes for advertisers and creators.” Loop Capital also thinks Meta’s AI tool, Advantage+, is gaining momentum. Advantage+ uses AI to automate campaigns and optimize ad placement across the company’s platform. “This appears to have the hallmarks of a winning product in that it adds value to all involved: (i) increased performance of advertising dollars, (ii) ease of use for advertising customers and (iii) increasing utilization across the Meta portfolio, finding underpriced attention and driving results,” Sanderson said. —CNBC’s Michael Bloom contributed to this report.