Wells Fargo has revised its price target for Meta Platforms Inc. (NASDAQ:META), lowering it from $795 to $754 per share, while continuing to assign the stock an Overweight rating. Meta’s current trading price stands at $658.12, and the company boasts a substantial market capitalization of $1.66 trillion alongside robust gross profit margins reaching 82.01%, based on InvestingPro data.
This reduction in price target, amounting to a $41 decrease, results primarily from a reassessment of Meta’s capacity contracts. Analyst Ken Gawrelski of Wells Fargo attributed this revision to a "meaningful upward revision to OpEx/CapEx estimates for 2026-2028," indicating rising expenditures forecasted over the medium term.
The firm identified a specific operational challenge involving a timing mismatch between Meta’s accelerated investments in artificial intelligence compute capacity and the company's current pace in discovering new use cases and products. This gap highlights the complexities in aligning its heavy AI infrastructure outlay with revenue-generating innovations in the short term.
Despite the lowered price target, Wells Fargo’s sustained Overweight rating reflects an underlying confidence in Meta’s strategic positioning and long-term earnings potential. Similarly, Stifel's recent advertising sector checks pointed to strong fourth-quarter results powered by Instagram Reels; however, Stifel has trimmed its price target for Meta to $785 from $875, while retaining a Buy rating.
In contrast, HSBC continues to endorse Meta with a Buy rating and a higher price target of $905, citing the company’s early and significant investments in artificial intelligence that bolster its advertising business revenues.
Meta is also navigating regulatory and legal developments. It secured a court suspension in Brazil regarding an antitrust proceeding linked to third-party AI tools on WhatsApp Business. Concurrently, the UK regulator Ofcom has initiated an investigation into whether Meta provided incomplete or inaccurate information about WhatsApp during a market review.
Amidst these company-specific factors, broader market dynamics are at play as TikTok’s U.S. operations await approval for sale to primarily American investors, sanctioned by both the Chinese and U.S. governments.