Analyst Upgrades Meta to Buy, Says AI Journey Just Beginning
Meta Platforms (META) has faced significant stock volatility recently. Following the release of its Q3 earnings report, the stock plummeted approximately 14%. The decline continued the next day, with an additional 3% drop attributed to a $16 billion tax charge related to new U.S. tax legislation.
Analyst Outlook on Meta’s Performance
Despite these setbacks, analyst Saken Ismailov from Freedom Capital Markets upgraded Meta’s rating from Hold to Buy. He has set a price target of $800 for the stock, citing strong advertising growth and consistent user engagement on platforms like Facebook, Instagram, and WhatsApp.
Positive Indicators in Q3 Earnings
Ismailov highlighted that Meta’s Q3 revenue exceeded expectations. The positive performance was fueled by robust demand for advertising and increased user activity across its platforms. The incorporation of AI-driven recommendation tools has been pivotal in enhancing user engagement.
Additionally, Ismailov mentioned the early monetization of WhatsApp as a promising avenue for future growth.
Investment in AI and Future Growth
While acknowledging that Meta’s rising capital expenditures related to data centers and AI systems are exerting pressure on profit margins, Ismailov remains optimistic. He noted that the company has increased its capital expenditure (CAPEX) guidance for 2025 and plans further investments in 2026 to bolster its AI and metaverse initiatives.
According to Ismailov, while these expenses may affect profitability in the short term, they are crucial for establishing stronger profitability in the future.
Wall Street’s Consensus on Meta Stock
Meta Platforms currently enjoys a consensus rating of Strong Buy among 42 Wall Street analysts. This consensus includes 34 Buy, 7 Hold, and 1 Sell ratings issued over the last three months. The average price target for META stands at $843.56, indicating potential upside of approximately 34.52% from its current price.
- Current Stock Rating: Strong Buy
- Analysts Upgrading: 34 Buy, 7 Hold, 1 Sell
- Average Price Target: $843.56
- Potential Upside: 34.52%
