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On Thursday, UBS analyst Stephen Ju increased the price target for Meta Platforms Inc. (NASDAQ: NASDAQ:META) shares to $786 from $736, while reiterating a Buy rating on the stock. Currently trading at $684.04 and commanding a market capitalization of $1.72 trillion, Meta continues to dominate the Interactive Media & Services industry. Ju’s optimism is based on the expectation that Meta will surpass revenue and earnings estimates for 2025, following the company’s recent guidance and budget announcements. InvestingPro analysis reveals 17+ investment tips for Meta, including strong financial health indicators and growth metrics.
Meta had previously disclosed its capital expenditure (CapEx) budget for 2025, which is expected to be between $60-65 billion, along with plans to hire more technical staff. With impressive revenue growth of 23.06% and an industry-leading gross profit margin of 81.5%, Meta’s financial foundation appears solid. Ju believes that the operational expenditure (OpEx) and first-quarter 2025 revenue guidance have positioned Meta to exceed top and bottom-line estimates throughout the year.
Ju highlights that current market estimates may not fully account for Meta’s potential to accelerate ad revenue growth. He notes that while consensus estimates suggest Meta will add approximately $21.4 billion in ad revenue in 2025, he sees the possibility for a higher figure, especially as the company overcomes compute capacity constraints that limited growth in 2024.
Furthermore, Ju points to the return on investment (ROI) from Meta’s generative AI investments. He anticipates additional advertising revenue from Meta AI and the development of business AI-based chatbots as new sources of revenue that have yet to be factored into projections.
The UBS analyst maintains a positive outlook on Meta’s stock, estimating a favorable risk-reward ratio. He believes the downside risk is limited to $561 per share, while the upside potential could reach as high as $969. Ju expects several catalysts to boost Meta’s performance throughout the year, including widespread adoption of Meta AI, accelerated growth in developed markets for WhatsApp and Messenger, and new product developments that could demonstrate paths to monetization.
In other recent news, Meta Platforms Inc. saw remarkable fourth-quarter performance with revenues and operating income surpassing expectations, earning the company an Overweight rating from JPMorgan and a price target of $725. TD Cowen also demonstrated confidence in Meta, raising the stock’s price target to $785 following a 3% revenue increase over consensus estimates. Cantor Fitzgerald followed suit, increasing the price target to $790 while maintaining an Overweight rating, citing Meta’s strong fourth-quarter results. BMO Capital Markets revised its outlook, raising the price target to $610, despite ongoing challenges with video monetization efficiency. Piper Sandler, admitting previous caution, raised its price target to $775, adjusting its fiscal year 2025 revenue estimate upwards by 1%. These are recent developments, reflecting the company’s strong financial health and robust growth prospects. The company’s anticipated investments and advancements in AI technology, such as the DeepSeek project, are expected to support continued strong revenue growth. However, Meta’s expense outlook for 2025 is projected to increase, which may necessitate a period of adjustment for the shares in the near term.
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