Oculus RIft Will Boost Facebook Even More The Next 6 Months, Says Credit Suisse

Credit Suisse maintains its Outperform rating on Facebook Inc (NASDAQ: FB) and raised the price target on the stock by $3 to $145 on the back of potential strong demand for Oculus Rift units.

The social media giant reported better-than-expected first quarter results and Oculus Rift headset, which began shipping last month, is widely regarded as one of the company's next leg of growth.

"We maintain our Outperform rating and our PT increases to $145 vs prior $142 as we push Oculus units into 2H16 and beyond, positively impacting our gross profit estimates," analyst Stephen Ju wrote in a note to clients.

Related Link: Facebook's Oculus Rift Arrives

Meanwhile, Facebook also registered a 15 percent increase in MAUs, to 1.65 billion. Mobile MAUs were up 21 percent to 1.51 billion. Mobile advertising revenue represented approximately 82 percent of advertising revenue for the first quarter, up from 73 percent of advertising revenue in the same quarter last year.

Ju raised his estimate for second-quarter mobile ad revenue to $4.75 billion from $4.74 billion, and his desktop advertising estimate fell to $1.02 billion from $1.03 billion.

In addition, Ju's advertising revenue estimate for the second quarter (on a consolidated basis) "now contemplates 51 percent growth to $5.77 billion, with mobile accounting for 82 percent of total advertising revenue."

"[W]e continue to believe: 1) FB will be able to drive long term revenue growth without a material lift in ad loads -NT drivers include Instagram/Video/DPA, 2) Street models continue to underestimate the LT monetization potential of new products." Ju wrote.

At time of writing, shares of Facebook were up 10.09 percent to $119.88.