UBS updated its outlook on Meta Platforms Inc. (NASDAQ:META) on Thursday, increasing the stock price target to $872.00 from $830.00 while maintaining a Buy rating. The firm’s revision follows Meta’s guidance for 2026 operating expense and capital expenditure, which UBS believes paves the way for asymmetrically positive 2026-2027 EPS revisions as the company begins to capture revenue from its AI-focused initiatives.
At the time of the note, Meta was trading at $718.73 and carried a market capitalization of $1.81 trillion, with a price-to-earnings ratio of 31.81, according to InvestingPro data. UBS pointed to the company’s robust unit economics as a foundation for its upgraded target: Meta reported gross profit margins of 82.01% and delivered 21.27% revenue growth over the trailing twelve months.
UBS emphasized the magnitude of Meta’s ad monetization acceleration, noting $36 billion of dollar growth in 2025 and an implied roughly $52 billion for 2026. The firm interpreted these figures as evidence of momentum in Meta’s core advertising business, which underpins the brokerage’s expectation for stronger absolute EPS outcomes even as operating expense and capital spending rise in 2026 and 2027.
Central to UBS’s thesis are the company’s AI-driven growth vectors. The note calls out several potential revenue levers: engagement gains from AI-generated content, business-focused AI tools for merchant customers, the company’s Meta AI initiatives, and AI-enabled devices. UBS also referenced the company’s timeline for model rollouts, saying the models that will power these products are expected to be released in the coming months.
Despite UBS’s projection of higher operating and capital expenditures over the next two years, the firm anticipates that larger revenue dollar additions will more than offset those costs, producing an absolute increase in EPS estimates. UBS described Meta’s fourth-quarter 2025 results as a "clearing event" that clarifies the company’s route to meaningful new revenue vectors.
Market reaction from other brokerages to Meta’s recent results was broadly favorable. The company reported fourth-quarter results in which both revenue and earnings per share beat analyst expectations, with revenues and EPS coming in about 3% and 8% above projections, respectively. Following those results, several firms adjusted their ratings or targets:
- Cantor Fitzgerald raised its price target to $860 while keeping an Overweight rating, citing Meta’s strong performance.
- Monness, Crespi, Hardt increased its target to $890 and revised its 2026 estimates by raising revenue forecasts but lowering EPS expectations.
- TD Cowen reiterated a Buy rating and held a $820 price target, noting an 18% year-over-year gain in impressions.
- Piper Sandler raised its price target to $880, pointing to a favorable outlook after the robust fourth-quarter showing.
- JPMorgan lifted its price target to $825 and emphasized a strong first-quarter revenue outlook that it expects to grow into the 30% range.
For investors focused on margin structure and unit economics, UBS’s note signals a potentially meaningful re-leveraging scenario: revenue pressure from rapid ad monetization and new AI-driven products could increase EPS even as near-term expenses tick up. That balance - higher upfront spend offset by larger revenue dollar accretion - is the central driver behind UBS’s higher valuation target.
What to watch next
- Execution and timing of the announced AI model releases and the degree to which they drive engagement and monetization.
- Quarter-to-quarter cadence of ad revenue dollar growth relative to the implied $52 billion in 2026.
- Actual operating expense and capex outlays in 2026 and 2027 and whether revenue gains translate into the EPS accretion UBS expects.