TD Cowen has reaffirmed its Buy rating on Meta Platforms Inc. and kept its price target at $820.00 after the company posted quarterly results that exceeded analyst expectations. The target implies upside from Meta's then-current trading level of $721.65, although InvestingPro data cited in the report indicates the stock is trading above its Fair Value, with a price-to-earnings ratio of 29.65.
Meta's fourth-quarter performance came in modestly ahead of consensus on the top and operating lines. Revenue was 2% above consensus, while operating income came in 3% above the Street view. Management attributed part of the beat to an 18% year-over-year increase in impressions, a metric observers have tracked closely as a gauge of ad demand and monetization potential. InvestingPro data included in coverage also highlights Meta's strong gross margins, with gross profit margins reported at 82.01%.
Looking ahead, Meta issued first-quarter revenue guidance that reached roughly 10% above consensus at the high end of the company's range. Management linked the stronger guidance to benefits from artificial intelligence that are supporting engagement and monetization, in addition to an approximately 4 percentage point tailwind from foreign exchange.
On the capital allocation front, Meta provided capital expenditure guidance for 2026 of between $115 billion and $135 billion. That range matches closely with TD Cowen's pre-report estimate, which was $125 billion at the midpoint. The company also set operating expense guidance that was 6% higher than TD Cowen's estimate at the midpoint.
Following the results and guidance, Meta shares traded up in after-hours trading, rising about 7% according to TD Cowen's note.
Analysts across the brokerage community reacted positively to the results and outlook. The fourth quarter showed a pattern of beats that follows earlier outperformance in the third quarter, when the company also exceeded expectations. Specifically, Meta reported fourth-quarter revenue and EBITDA that beat by 2% and 4%, respectively, after posting third-quarter results that were 4% and 8% above expectations.
Several firms adjusted their price targets and maintained constructive ratings on the stock. Piper Sandler raised its target to $880 while keeping an Overweight rating. Scotiabank moved its target to $700, citing favorable foreign exchange dynamics. JPMorgan increased its target to $825, referencing a robust first-quarter revenue outlook with growth expected in the 30% range. Citizens reiterated a Market Outperform rating and set a $900 price target, highlighting artificial intelligence as a driver of engagement. William Blair reiterated an Outperform rating and pointed to rising engagement metrics and the company’s AI strategy.
Operational metrics cited by the company and analysts included an aggregate daily active user base of more than 3.5 billion across Meta’s Family of Apps, gains in ad impressions, and higher Instagram Reels watch time. These trends were presented alongside the company’s guidance and analyst commentary as supporting the more optimistic revenue and valuation outlooks from several brokerages.
Investors and market watchers should note the balance of guidance and expense assumptions in the results: while capital spending guidance aligned with analyst expectations, operating expense guidance came in higher than one major firm’s estimates at the midpoint. The company also called out both AI-driven monetization improvements and foreign exchange effects as contributors to the stronger near-term revenue outlook.
Overall, the combination of modest beats, elevated engagement metrics, explicit AI tailwinds, and a substantial capex plan underpinned the sustained positive reaction from multiple analyst teams.