Piper Sandler lowers Arbor Realty Trust stock price target on credit issues
On Thursday, Raymond (NSE:RYMD) James analyst Josh Beck increased the price target for Meta Platforms Inc. (NASDAQ: NASDAQ:META) to $800, up from the previous $725, while reiterating a Strong Buy rating on the stock. The revision reflects Beck’s optimism about Meta’s potential in artificial intelligence (AI) development and its impact on the company’s revenue. The stock, currently trading near its 52-week high of $682.58, has demonstrated remarkable strength with a 70% return over the past year. According to InvestingPro analysis, Meta maintains a "GREAT" financial health score, supported by strong fundamentals and market performance.
Beck’s confidence in Meta stems from the company’s advancements in AI, including Meta AI, with ambitions to grow its user base from 750 million to 1 billion. Additionally, the fourth generation of Llama is expected to set the state-of-the-art, being natively multi-modal with argentic capabilities. Beck also sees significant potential in AI Engineers and SMB agents, which could collectively represent over a $50 billion run-rate opportunity that justifies increased capital investment. With an impressive gross profit margin of 81.5% and robust revenue growth of 23%, Meta has demonstrated its ability to efficiently monetize its technological investments.
The analyst projects that attention will soon turn to 2026, with expectations for AI monetization to become a significant contributor to Meta’s revenue. Beck anticipates smart glasses could scale to 5-10 million units, reducing Reality Labs losses, and AI Engineers may alleviate R&D expenses. Moreover, a shift from pre-training to more directly monetizable inference workloads and increased engagement and ad-load on Threads could further enhance revenue.
Beck’s analysis follows Meta’s reported revenues for the fourth quarter of 2024 and the first quarter of 2025 estimates, which stood at $48.4 billion and $40.7 billion, respectively. These figures were above and below the consensus estimates of $47.0 billion and $41.7 billion from other analysts. The results were closer to the expectations of the buyside market, and with already high capital expenditure forecasts, the analyst believes the market can absorb the higher expense outlook due to the promising narrative of AI monetization and the potential for expense optimization in the future. With a market capitalization of $1.71 trillion and a P/E ratio of 31, Meta’s valuation reflects investor confidence in its growth trajectory. For deeper insights into Meta’s valuation and growth potential, InvestingPro subscribers can access comprehensive financial analysis and 17 additional ProTips in the detailed Pro Research Report.
In other recent news, Meta Platforms Inc. has been the subject of several analyst updates. Susquehanna raised Meta’s stock target to $800, citing the company’s strong fourth-quarter results and promising potential in artificial intelligence (AI). Despite some adjustments to its financial forecasts, Susquehanna remains optimistic about Meta’s future growth. Similarly, JMP Securities maintained its bullish stance on Meta, reiterating a Market Outperform rating with a $750 price target, highlighting the company’s significant year-over-year advertising revenue growth and AI integration.
On the other hand, Needham maintained an Underperform rating on Meta, expressing concerns over the company’s future financial outlook. The analysts pointed to the company’s guidance, which indicates a slowdown in revenue and earnings per share growth. They also highlighted Meta’s commitment to substantial long-term capital expenditures, suggesting potential pressure on the company’s free cash flow and profit margins.
Furthermore, Wells Fargo (NYSE:WFC) set a new price target for Meta at $752, following the company’s robust fourth-quarter revenue growth. The analyst sees Meta’s strong performance as a positive indicator for the eCommerce and digital advertising sectors.
Top executives from Microsoft (NASDAQ:MSFT) and Meta Platforms defended their significant expenditures on AI development, with Microsoft’s CFO, Amy Hood, stating that the company’s capital spending would hold steady, despite plans to lower the growth rate of their investment in AI development.
These are the recent developments involving Meta Platforms Inc.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.