J.P. Morgan’s Anmuth: Facebook’s Mobile Ad Revenue Only Going Up From Here

What a difference a few quarters makes.

After a banner second quarter, Facebook is gaining the Street’s confidence again. Why? Because the company is beginning to prove its mobile chops.

“We project Mobile will surpass 50 percent of Facebook’s ad revenue in 4Q13 and represent 60 percent of ad revenue in 2014,” J.P. Morgan analyst Doug Anmuth said in a research note on Thursday.

That’s a big shift from 2012, when Facebook had relatively few mobile monetization products and the vast majority of the company’s advertising revenue was still coming from desktop. But over the course of the year, Facebook has managed to quickly create a number of mobile revenue products, boosting its mobile ad revenue to 41 percent of its overall advertising business.

Now, the Street is showing Facebook’s stock a little more love. After failing to surpass its $38 IPO price for more than a year, Facebook shares rose nearly 70 percent over the last two months, hitting an all-time high of $45.05 on Wednesday afternoon.

And they may rise higher still in the months ahead, buoyed by some other improvements Anmuth sees coming: More entertainment-industry ads (considering Facebook’s heavy targeting of celebs and media as of late), and better right-rail ads due to heavier emphasis on Facebook’s exchange product.

As for mobile ads, we’ll have to wait and see that performance split come next quarter.