Redburn Atlantic has elevated Meta Platforms to a Buy rating and increased its price objective to $900 from $740, saying investor concern over escalating artificial intelligence outlays has overshadowed the longer-term profit potential of the company.
The brokerage noted that recent weakness in Meta's share price reflects uncertainty tied to the company’s substantial AI investments, with particular attention focused on its Superintelligence Labs program. Meta is scheduled to release quarterly results on Wednesday. In Monday premarket trading, the shares were down about 1%.
Redburn argues that Meta still operates the most effective digital advertising "demand machine," matching user attention with advertiser dollars with high efficiency. The firm also notes that Meta can still expand in non-search advertising, where it currently holds roughly one-third of the market. Meta itself forecast an 18% compound annual growth rate for ad revenue from 2025 through 2028, a pace Redburn highlights as above the 16% consensus figure.
At the same time, Redburn expects concern about AI expenses to intensify around the company’s issuance of fiscal 2026 guidance. The brokerage has raised its FY26 total cost estimate to $158.6 billion, which exceeds the consensus estimate of $150.5 billion, and has lifted its capital expenditure projection to $117.1 billion from a prior $110.0 billion.
Those adjustments, Redburn warned, could produce a near-term earnings-per-share headwind of approximately $2.75. The firm said that such pressures could drag consensus FY26 EPS down to a range of $27 to $28, versus a prior consensus figure near $29.55.
Despite the shorter-term earnings risks tied to elevated operating expenses and capex, Redburn maintains that Meta is well positioned to generate returns from its AI investments over time. The brokerage highlighted two specific long-horizon opportunities. First, it sees potential for agentic AI capabilities to expand Meta’s Advantage+ product into a broader platform for small and medium-sized businesses. Second, Redburn pointed to AI-driven video generation as a capability that could reshape aspects of consumer entertainment, an area where Meta already has significant scale.
Redburn also stated its expectation that Meta is likely to return near the frontier of AI model development during the year, aided by improving hardware cycles and advancements in model execution. The firm projects that, even after incorporating higher AI-related expenditures, Meta’s return on invested capital should remain above 20% through 2028.
On valuation, Redburn said that at roughly $650 per share the stock does not fully reflect these longer-term opportunities, even if near-term guidance or spending commentary produces volatility in the months ahead.
Note: This article reports Redburn Atlantic’s published estimates, forecasts and assessments regarding Meta Platforms. The figures and projections cited above reflect the brokerage’s stated views.