William Blair has reaffirmed an Outperform rating on Meta Platforms Inc. (NASDAQ: META), citing improving engagement statistics and the company’s evolving artificial intelligence strategy as key underpinnings of its view. The firm highlighted metrics across Meta’s Family of Apps and management’s visibility on AI product rollouts as central to its outlook.
Meta is currently valued at $1.69 trillion and remains a leading firm in the Interactive Media & Services industry, with trailing twelve-month revenue of $189.5 billion. In December, the company reported that its Family of Apps surpassed 3.5 billion daily active users. Within that total, Facebook and WhatsApp each exceeded two billion daily active users, while Instagram is described as approaching the two billion mark.
Advertising activity showed momentum in late 2025. Ad impressions increased 18% in the fourth quarter and rose 12% across the full year. On the content engagement front, Instagram Reels watch time climbed by more than 30% in the fourth quarter, underscoring stronger consumption of short-form video on the platform.
On the AI front, Meta has signaled an accelerated cadence of model and product introductions. The company plans to deploy a new AI model in the coming months, a development CEO Mark Zuckerberg has framed as evidence of the rapid trajectory of the company’s Superintelligence Labs. Management also expects to release additional AI models and products throughout 2026, pointing to an ongoing program of AI investments and commercialization.
These AI initiatives sit alongside a notable increase in capital expenditures. Meta’s capex totaled $72 billion in 2025, and the company’s 2026 guidance points to a midpoint of $125 billion in capital spending. Management attributes this step-up largely to investments in Superintelligence Labs as well as continued build-out of core business infrastructure. Operating expenses are also projected to rise, with guidance indicating $165.5 billion at the midpoint for 2026.
Even with the elevated investment profile, Meta reported a substantial gross profit margin of 82% and a moderate debt position of $51 billion, metrics the company and analysts have referenced as evidence of financial resilience. Over the last twelve months, Meta produced $98.4 billion in EBITDA and $44.8 billion in levered free cash flow, and delivered diluted earnings per share of $22.63. Management expects full-year operating income for 2026 to exceed 2025 levels, noting that much of the expense growth reflects infrastructure costs, higher depreciation, and infrastructure operating expenses.
Meta’s fourth-quarter 2025 results also outperformed consensus on revenue and operating income, beating expectations by 2.5% and 2.9%, respectively. That beat, together with the company’s guidance, has prompted several price target revisions and rating actions across the sell-side.
BMO Capital raised its price target on Meta from $710 to $730 while maintaining a Market Perform rating. BofA Securities increased its target from $810 to $885, calling out the influence of artificial intelligence on returns. RBC Capital reiterated an Outperform rating, stating that Meta’s Q4 revenue beat and a sizeable guidance raise for Q1 helped allay investor concerns about future expenditures. Goldman Sachs nudged its price target from $815 to $835, citing accelerating momentum in the core advertising business and AI investments, and KeyBanc Capital Markets adjusted its target from $835 to $855 based on a positive revenue growth outlook and AI’s demonstrated value delivery.
Collectively, those analyst moves reflect a general uplift in sentiment around Meta’s near-term operating performance and its longer-term investment program. While the company is committing heavily to AI and infrastructure, the combination of high gross margins, sizable cash generation and a manageable debt load are central to the case that Meta can fund its strategic initiatives while sustaining profitability.
Summary
William Blair reiterated an Outperform on Meta, citing strong engagement metrics and an advancing AI roadmap. Meta reported over 3.5 billion daily active users across its Family of Apps in December, ad impressions and Reels engagement rose materially in Q4 2025, and management plans additional AI model and product rollouts through 2026. The company is significantly increasing capital and operating expenditures to support Superintelligence Labs and infrastructure, while maintaining an 82% gross margin, $51 billion of debt, and substantial EBITDA and free cash flow.
Key details
- Valuation and revenue - Market value of $1.69 trillion and trailing twelve-month revenue of $189.5 billion.
- User and engagement metrics - More than 3.5 billion daily active users across the Family of Apps; Facebook and WhatsApp each exceeded two billion daily active users; Instagram nearing two billion. Q4 ad impressions up 18%, full-year impressions up 12%, and Reels watch time up over 30% in Q4.
- Spending and financials - 2025 capex at $72 billion; 2026 capex guidance midpoint of $125 billion; 2026 operating expense midpoint of $165.5 billion; 82% gross profit margin; $51 billion debt; LTM EBITDA of $98.4 billion; LTM levered free cash flow of $44.8 billion; diluted EPS of $22.63.