TLDR
- Wells Fargo increased its Meta price target from $796 to $1,000 while maintaining an Overweight rating.
- Analysts anticipate 2027 will mark a low point for earnings as AI infrastructure spending accelerates ahead of revenue generation in 2028.
- Citi maintained its Buy rating, highlighting that Meta’s Muse assistant achieved 6.6 million downloads within 16 days as the leading app.
- Meta shares increased 0.2% to reach $743.01, marking nearly 21% growth since Muse’s September 8 debut.
- Central Pacific Bank Trust Division expanded its META holdings by 65% in the most recent quarter, valuing its position at approximately $5.2 million.
Shares of Meta Platforms edged up 0.2% to $743.01 during Tuesday’s session, extending the stock’s advance beyond 20% since early September. The gains follow a pair of analyst reports examining the social media giant’s artificial intelligence strategy.
Wells Fargo analyst Ken Gawrelski boosted his price objective to $1,000 from the previous $796 target. His Overweight recommendation remains unchanged.
However, the analyst’s outlook contains a cautionary element for the near term. Gawrelski anticipates that 2027 will represent a low point for Meta’s profitability.
The reasoning centers on Muse, Meta’s AI assistant, which isn’t expected to deliver significant revenue during that timeframe. At the same time, spending on infrastructure continues to escalate.
Gawrelski also flagged a $5 billion impact from discontinued capacity resales. Meta now requires that computing power for its proprietary AI offerings rather than leasing it to external parties.
His recommendation for shareholders: focus on the horizon beyond 2027. He projects 2028 as the inflection point when AI-driven revenue begins layering onto Meta’s core advertising operations.
An interesting detail emerged from the analysis. Gawrelski believes current Wall Street forecasts for 2027 remain overly bullish. He anticipates downward revisions as analysts absorb the delayed monetization timeline.
The Wells Fargo team drew parallels between the Muse deployment and Meta’s 2022 Reels transition. That strategic shift redirected user engagement from static posts to short-form video content, ultimately proving successful.
Citi Highlights Strong Early Adoption
Citi analyst Ronald Josey delivered a more immediately optimistic assessment on Tuesday. He maintained his Buy rating alongside an $800 price objective.
Josey emphasized that Muse has surpassed 6.6 million downloads. The application has held the top position in download rankings for 16 consecutive days.
Citi’s long-term projection sees Muse generating more than $27 billion in revenue once fully scaled. Such figures represent meaningful contribution potential to Meta’s overall business.
Market reaction to both analyst notes proved muted. Share price movement remained minimal despite the positive commentary.
Institutional Investors Continue Accumulation
Beyond Wall Street research coverage, institutional capital continues flowing into the stock. Central Pacific Bank Trust Division increased its META holdings by 65% during the previous quarter.
The institution acquired an additional 2,817 shares, expanding its total position to 7,169 shares valued at roughly $5.2 million. Other smaller investment firms, including Watchman Group and Penney Financial, similarly expanded their allocations.
Nearly 80% of Meta’s outstanding shares are currently held by institutional investors and hedge funds. This represents substantial professional investment backing for the company.
According to MarketBeat data, the consensus analyst price target stands at $787.86. Individual targets span from a low of $700 to a high of $900.
Corporate insiders have not been accumulating shares recently. COO Javier Olivan and CEO Mark Zuckerberg both executed share sales in September through predetermined trading programs.
Total insider sales have reached approximately $99.9 million over the past 90 days. Company insiders maintain ownership of roughly 13.5% of outstanding shares.
Meta’s most recent quarterly results, released July 29, reported revenue of $60.80 billion. This exceeded analyst expectations of $60.22 billion and represented 28% growth compared to the prior year.
Earnings per share reached $6.18, falling short of the $7.19 consensus estimate. The company distributes a quarterly dividend of $0.525 per share, translating to approximately 0.3% yield.
Shares began Tuesday’s trading at $741.90, approaching the 12-month peak of $779.82.
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