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Investing.com - Baird has reiterated an Outperform rating on Meta Platforms Inc. (NASDAQ:META) with a price target of $820.00, positioning it between the current analyst range of $616 to $1,086. Meta currently trades at $751.67, just 6% below Baird’s target and within 1% of its 52-week high of $796.25.
The research firm noted that Meta’s margins are likely to decrease in 2026 due to significant capital and operating expenses. These increased costs stem from what Baird describes as the "compute-starved" company’s pursuit of artificial general intelligence (AGI) and enhanced AI capabilities across its core applications. Currently, Meta boasts impressive gross profit margins of nearly 82% according to InvestingPro data, giving the company substantial room to absorb these planned investments.
Meta plans to implement these AI improvements to benefit users, content creators, and advertisers throughout its platform ecosystem. The company’s CEO had previously indicated these upcoming investments during Meta’s third-quarter earnings report.
Baird acknowledged that the expense outlook might challenge investor confidence in the near term. Despite this concern, the firm recommends that investors purchase Meta shares during any significant price declines.
The research firm cited Meta’s growth profile, increasing dominance in social media, and potential value from AI and wearable technology as compelling reasons for its continued positive outlook on the company. This growth trajectory is supported by Meta’s 19.4% year-over-year revenue growth and strong five-year revenue CAGR of 18%. Want deeper insights into Meta’s financial health and growth prospects? InvestingPro offers comprehensive Pro Research Reports on Meta and 1,400+ other top stocks, transforming complex Wall Street data into clear, actionable intelligence for smarter investing decisions.
In other recent news, Meta Platforms Inc. reported its third-quarter earnings for 2025, revealing a significant earnings per share (EPS) miss compared to analyst forecasts. The company announced an EPS of $1.05, falling short of the expected $6.68, resulting in an EPS surprise of -84.28%. However, Meta’s revenue exceeded expectations, reaching $51.2 billion compared to the anticipated $49.36 billion, marking a 26% increase year-over-year. Following the earnings report, Piper Sandler adjusted its price target for Meta to $840 from $880, while maintaining an Overweight rating, citing impressive third-quarter results but expressing concerns about future expenses. Similarly, Goldman Sachs lowered its price target to $815 from $870, maintaining a Buy rating, and noted the company’s strong core business operations amidst an elevated investment cycle. In contrast, Oppenheimer downgraded Meta from Outperform to Perform due to concerns over the company’s significant investments in artificial intelligence, likening it to previous Metaverse spending. These developments reflect a mixed reaction from analysts, focusing on Meta’s financial performance and strategic investments.
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