5 big analyst AI moves: Apple lifted to Buy, AI chip bets reassessed
On Tuesday, Wolfe Research reiterated an Outperform rating on Meta Platforms Inc. (NASDAQ: NASDAQ:META), with a steady price target of $730.00. The social media giant, currently trading at $677.96, has reached a market capitalization of $1.71 trillion. According to InvestingPro analysis, Meta appears overvalued at current levels, though it maintains an impressive financial health score of "GREAT." The firm anticipates that Meta will surpass expectations for both revenue and earnings in the fourth quarter, aligning with investor predictions. This optimism is supported by Meta’s strong performance, with revenue growing 23.06% over the last twelve months and maintaining an impressive gross profit margin of 81.5%. Looking ahead to fiscal year 2025, Wolfe Research expects Meta to guide total expenses between $112 billion and $117 billion, slightly above the consensus estimate of $111 billion from Wall Street.
For the first quarter revenue guidance, Wolfe Research projects figures between $40 billion and $42 billion, which is in line with Wall Street’s expectations at the higher end. The firm also highlighted that after recent discussions, it is likely management will provide updates on several key topics during the earnings call. These include the progress of Llama 4, Meta’s competitive stance against DeepSeek, and potential cost efficiency improvements in computing and data center (DC) operations.
Meta had previously announced capital expenditure (CapEx) guidance for 2025, projecting between $60 billion and $65 billion, which matched the expectations of the buy-side analysts. The company is scheduled to report its earnings on Wednesday, January 29th, after the market closes. Wolfe Research and Street estimates suggest that Meta is positioned to report approximately 18% year-over-year revenue growth for the fourth quarter.
The stock performance of Meta has been strong, outperforming the S&P 500 by 9 points since the day following its last earnings report on October 30th. The sentiment heading into the upcoming earnings announcement is described as neutral-to-positive.
In other recent news, Meta Platforms has been the center of attention due to its significant developments in artificial intelligence. The company’s ambitious capital expenditures, projected to reach between $60 billion and $65 billion by 2025, are supported by its robust financial health, demonstrated by an impressive 81.5% gross profit margin and 23% revenue growth over the last twelve months.
Analysts from firms such as Citi, Stifel, Jefferies, and Bank of America have provided insights on Meta’s AI investments, potential policy violations by DeepSeek, and unverified claims about significantly lower AI training costs. Citi maintains a Buy rating on Meta with a steadfast price target of $753.00, highlighting the company’s strides in generative AI technology with the introduction of its DeepSeek™ R1 model. Stifel analysts emphasized the importance of ongoing infrastructure investments for maintaining the United States’ lead in the global AI race.
Jefferies expressed confidence in the continued investment in AI, which is expected to benefit key stocks despite potential near-term sentiment risks. Meanwhile, Bank of America analysts highlighted the potential for decreased costs in AI model training to benefit cloud service customers. These recent developments indicate expectations of strong earnings and revenue growth, contributing to a robust gross profit margin of 81.5% for Meta.
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