Meta's Stock Price Targets: Upside and Downside Dynamics

Meta Platforms stock analysts' consensus price targets have slightly decreased from $863.20 to $848.43. This situation indicates that Wall Street has adopted a more cautious approach to the company's valuation. At the same time, a small decrease in the discount rate and an increase in expected revenue growth suggest that there is still optimism regarding Meta's ongoing expansion.

Analysts' comments on Meta Platforms continue to be actively updated. Below is a structured overview of the updated price targets and ratings from leading research firms:

Bullish Perspectives: Many analysts (Truist, Bernstein, Goldman Sachs, Piper Sandler, UBS, Wells Fargo, and Mizuho) express confidence in Meta's growth prospects. The ongoing momentum in advertising revenue, effective user engagement, and AI-supported product development are the fundamental elements behind this confidence.

Truist and UBS both maintain Buy ratings, highlighting strong gains in advertising share supported by AI recommendations and improved revenue modeling. UBS has raised its price target to $900. Truist’s recent updates remain among the highest targets despite some moderate adjustments (latest: decreased from $875 to $900).

Wells Fargo has raised its price target from $811 to $837, emphasizing ongoing advertising strength. Strong fourth-quarter guidance and additional interaction gains expected from continued investments are noted.

Bernstein draws attention to AI-supported revenue growth, stating that Meta is positioning its investments in leading technology labs. Therefore, maintaining its performance expectations, it has only slightly lowered its price target from $900 to $870. Piper Sandler has decreased its price target to $840, yet remains overweight, finding the recent 26% annual growth “impressive.”

Mizuho has initiated coverage with an Outperform rating, naming Meta as the "Top Pick" in the Internet sector with a target of $925. This is supported by sector-leading AI/ML capabilities and a tremendous scale of daily active users.

The common driving forces identified by bullish analysts include AI applications, stronger-than-expected user and revenue growth, and sustained investments. However, even among bullish analysts, there are moderate concerns regarding valuation and the potential for near-term volatility.

Bearish Perspectives: Some analysts have become more cautious, lowering their targets or, in one case, downgrading the stock. Oppenheimer has downgraded Meta from Outperform to Perform, highlighting the high levels of planned investments in AI and superintelligence and the uncertainty of net income returns in the near term.

RBC Capital has reduced its price target from $840 to $810, taking into account a “challenging” report in the third quarter. Concerns have been raised regarding the sustainability of the AI product narrative alongside a soft fourth-quarter guide and rising capital/operational projections. RBC Capital maintains the Outperform rating but emphasizes the need for more tangible income results from AI initiatives.

In summary, Wall Street generally rewards Meta Platforms for its effectiveness in driving growth through innovation and investments. However, ongoing discussions about valuation and uncertainties surrounding transformative investments in AI have caused analysts to remain cautious about risks.

Meta Platforms is also aiming to conduct a major bond sale worth $25 billion to support investments in AI and infrastructure. Vishal Shah, who was previously responsible for Meta's metaverse initiatives, has now taken charge of AI product management. This highlights Meta's focus on AI-supported products.

The European Commission has brought Meta under accusation of restricting independent researchers' access to data on Facebook and Instagram. The company could face fines of up to 6% of its global revenue. Meta has partnered with Blue Owl Capital for the development and co-ownership of the $27 billion Hyperion data center, thus strengthening its global AI infrastructure.