Social media giant Meta (META) saw its stock sink on Thursday after the company announced in its Q3 earnings report that it plans to increase AI spending through the rest of this year and into 2026. While CEO Mark Zuckerberg said the investment is necessary to keep up with rising demand for AI, Wall Street wasn’t convinced. As a result, analysts quickly cut their price targets due to worries about overspending and weak cost discipline, even as Meta’s core business continues to grow.
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More specifically, BofA lowered its price target from $900 to $810 but maintained a Buy rating, while TD Cowen lowered its target from $875 to $810 as well. Separately, KeyBanc’s five-star-rated Justin Patterson reduced his target from $905 to $875, and other firms, including Goldman Sachs, Citi, Morgan Stanley, and Cantor Fitzgerald, followed with similar moves while mostly maintaining their Buy ratings. This shows that there is less confidence in Meta’s near-term upside.
However, a few remained optimistic. In fact, five-star Wedbush analyst Scott Devitt kept his price target at $920 despite the cost concerns. Additionally, Zuckerberg tried to ease fears by noting that Meta’s AI-powered ad tools are now generating $60 billion annually. He said that even if the company builds too much computing capacity now, it will likely need it later for internal tools or third-party services. Nonetheless, Meta’s $4 billion quarterly loss from Reality Labs didn’t help the narrative.
Is Meta a Buy, Sell, or Hold?
Overall, analysts have a Strong Buy consensus rating on META stock based on 39 Buys, eight Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $857.91 per share implies 28.8% upside potential.
