Analyst revisits Meta stock price target as Zuckerberg…

Analyst revisits Meta stock price target as Zuckerberg drops bombshell

Meta Platforms shares nudged higher in early Friday trading following a bullish outlook on the social media giant from a top Wall Street analyst who sees the stock as one of his favorite picks heading into the new year.

Facebook and Instagram parent Meta (META) was one of the top-performing Magnificent 7 stocks last year, rising more than 66% and adding more than $630 billion in market value as its family of apps saw solid user growth and ad sales powered higher amid a resurgence in global online spending.

Investors are also betting that Meta's nascent push into AI technologies and the hardware and products it will improve will drive early bottom-line growth and offset the "significant increase in capital spending forecast by CEO Mark Zuckerberg.

In fact, in an early Friday Facebook post, Zuckerberg said that Meta would likely spend between $60 billion and $65 billion on capital projects this year, a $32 billion increase from 2024 levels and well ahead of the Street's consensus forecast of around $51 billion.

Meta CEO Mark Zuckerberg said his social media giant will likely spend between $60 billion and $65 billion on capital projects this year.
Bloomberg/Getty Images

"I expect Meta AI will be the leading assistant serving more than 1 billion people, Llama 4 will become the leading state of the art model," Zuckerberg said. "This is a massive effort, and over the coming years it will drive our core products and business, unlock historic innovation, and extend American technology leadership."

META AI could give a big boost

Trust analyst Youssef Squali, who reiterated his 'buy" rating and $700 price target on Meta in a note published Friday, sees Zuckerberg's AI focus as already helping its ad sales momentum.

"Meta’s AI investments are driving better ranking and recommendation results for users and advertisers, fueling sustained ad spending, especially across CPG and upper and middle funnels," Squali said. "We also see potential contribution from AI agents and AR/VR products over time."

Meta will also likely benefit from the uncertainty surrounding the future of ByteDance-owned TikTok, the short-video sharing app that Congress forced to sell its U.S. assets or shut down operations in its most important market.

President Donald Trump gave the group a 75-day reprieve to find a U.S.-based buyer. Still, Meta is already moving quickly to bring some of TikTok's 170 million users over to its Instagram reels, and other short-form video offerings on its platform.

"We view Meta as a key beneficiary of TikTok's mishaps and as one of our 2025 favorites," Squali said.

Meta Q4 earnings are fast approaching.

Meta will publish its fourth-quarter earnings on Wednesday, Jan. 29. Analysts expect a bottom line of $6.77 per share, a 27% increase from the prior-year period, and revenues rising 17% to $47 billion.

Last fall, Meta estimated revenue in the region of $45 billion to $48 billion, while overall capital spending for the 2024 year would be held largely in line at between $38 billion and $40 billion.

Squali at Truist said he's looking for Meta to post results at the "higher end" of its guidance but in line with broader Street forecasts. Looking into the current quarter, he notes that "tougher year-on-year comps" will likely lead to a modest slowdown in revenue growth, which he pegs between $41 billion and $43 billion.

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Longer-term, however, the stock remains a compelling story.

"Meta remains one of our favorite names entering 2025, a positive stance that's predicated on sustained demand momentum fueled by strong products and execution driving share gains, and higher margins despite heavy investments into AI/ML," Squali said.

Meta Platforms shares were marked 0.7% higher in early Friday trading to change hands at $640.65 each.

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