Facebook Stock Forecast: Why Facebook Is Interested In Competing With Amazon’s Echo Show

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

Facebook Stock Forecast


  • Facebook’s interest in consumer hardware is not only limited to selling Oculus VR products.
  • Rumor has it that Facebook will soon launch a video-chat home product that will compete with Amazon’s $229 Echo Show.
  • The product’s codename is “Aloha.” It’s Facebook’s latest effort to further engage its more than 2 billion users.
  • Facebook’s Aloha should also become a large-display gadget where it can deliver targeted advertising.
  • FB still touts positive near and long-term algorithmic forecasts from I Know First.

Facebook (FB) bought Virtual Reality gaming hardware producer Oculus for $2 billion three years ago. It was a strong hint that Facebook really wants to be a vendor of consumer gadgets. Advertising is not going to be Facebook’s sole business. Selling consumer hardware is a small but growing diversification move.

Rumor has it that the next product from Facebook is a large-screen video chat gadget called “ Aloha.” It functions like Amazon’s new $229 Echo Show. The Echo Show is a smart home appliance with a touchscreen display which could be used to surf the web, watch streaming movies, do video chats, and order products from Amazon’s marketplace.

My bet is that Aloha will be a bigger-size version of the Echo Show . It’s a home appliance that’s like a voice-based tablet for Facebook’s 2 billion users. It will probably run on Android OS and have pre-installed Facebook mobile apps.

facebook stock forecast

(Source: Amazon)

 Zuckerberg Himself  Is The Proponent Of Aloha

 The Facebook Aloha will definitely serve as Artificial Intelligence gadget for its users. CEO and and Facebook founder Mark Zuckerberg already programmed his own version of Amazon’s voice-based Alexa AI service last year. Zuckerberg his Jarvis home automation AI program using Python, Objective C, and PHP. The Facebook Aloha home appliance is going to host Zuckerberg’s Jarvis smart assistant software.

facebook stock forecast

(Source: Facebook)

Zuckerberg’s initial Jarvis code has natural language processing, speech recognition, and face recognition AI systems. It will be a software voice-control command center to control other home appliances like cameras, lights, thermostat, sound systems, toaster, and doors. Aloha is the obvious end-user gadget where Jarvis can serve its multi-function abilities.

Smart Speakers With Touchscreen Displays Will Be More Successful Than VR Headsets

I believe that smart speakers like the Aloha could attract more buyers than Oculus Rift Virtual Reality headsets. It offers much more than just playing games in a VR setting. Virtual Reality is still a nascent industry, there’s very limited application for VR gadgets. Oculus is not going to accelerate Facebook’s rise as a vendor of consumer hardware.

Facebook’s persistent online influence could lead to higher sales of smart speakers. Gartner’s forecast for smart speakers in the U.S. was it will only grow to 125 million by year 2020. However, that study was made before Facebook gets involved. My view now is that the U.S. could see more than 200 million smart speaker installations three years from now. Facebook has 2 billion users that could be potential customers for the Aloha.

facebook stock forecast

My takeaway is that smart speakers with touchscreen displays could help this niche product grow to a 100 million unit sales per year industry.

Facebook’s Aloha is another thumbs-up for voice-activated Artificial Intelligence home appliances. A hands-free gadget than can do video-chats via Messenger while cooking at the kitchen is a palatable business idea. Amazon’s success with its Alexa-powered speakers is why Google (GOOG) and Apple (AAPL) have their own smart speakers now.

The differentiating feature is that Facebook is emphasizing Aloha as a video chat appliance. This is excusable, Apple was selling its HomePod as a music system, not primarily as a smart home assistant. Whatever marketing jargon is used, the Facebook Aloha is still a smart speaker.


 Zuckerberg is not after making profits on selling consumer hardware. The Aloha voice-chat appliance/smart speaker is going to further increase engagement with Facebook’s 2 billion users. The longer Facebook can retain the daily attention of its users, the more ads it could serve to them. Aloha will also serve as a new channel where Facebook can deliver targeted ads.

Facebook is expanding its Artificial Intelligence reach with its own consumer appliance. Building up long-term loyalty with its users requires Facebook to offer more usability. More importantly, the Aloha could gather more personal data/habits of people at home. Like the Echo Show, the Facebook Aloha will likely have an always-on microphone and high-definition camera which could gather intelligence inside households and office settings.

Facebook’s business has always been intelligence gathering about its users for the sole purpose of creating targeted ads for them. My buy rating for FB is in line with its positive near and long-term algorithmic forecasts from I Know First.

facebook stock forecast

Analysis of monthly technical indicators and moving averages trend also supports my bullish recommendation for FB. Barring any serious setback, FB could breach $185 before 2017 ends. The average 12-month price target for FB at TipRanks is $192.61. FB is currently trading below $168. Majority of Wall Street analysts believe FB obviously has further upside potential.

facebook stock forecast

Source: investing.com)

Past I Know First Forecast Success with FB

I Know First has made accurate predictions on FB in the past, such as its bullish article published on April 26th, 2017. In the article, it explains that Facebook’s average revenue per user increased by 34% to $15.98 compared to last year. Mobile advertisement now accounts for over 80% of the company’s total advertising revenue. Within a 3 month time period, FB shares increased by 13.05% in line with the I Know First algorithm’s forecast. See chart below.

facebook stock forecast

(Source: Google Finance: FB)

This bullish forecast for FB was sent to I Know First subscribers on April 26th, 2017. To subscribe today click here.

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

facebook stock forecast

facebook stock forecast