Meta Platforms received a notable vote of confidence from Wall Street on Tuesday, as Wells Fargo analyst Ken Gawrelski raised the firm’s price target on the stock to $1,000 from $796, while maintaining an Overweight rating. The move reflects growing enthusiasm for Meta’s new consumer AI agent, Muse, though Wells Fargo cautioned that the financial payoff may take longer than some investors expect.
Gawrelski said investor excitement around the Muse product cycle was warranted, but he expects Meta’s third-quarter earnings call to temper expectations for meaningful revenue contributions from Muse in 2027. The firm sees 2027 as a potential trough earnings year, with operating expenses reaching $210 billion to $215 billion, above the consensus estimate of roughly $202 billion. Wells Fargo also projects 2027 earnings per share of $31 to $32, compared with Wall Street’s estimate of about $34. The analyst pointed to a $5 billion impact from lost capacity resales, as Meta redirects hardware toward its own AI products. He compared the current investment phase to Meta’s earlier Reels pivot, suggesting investors should look past 2027 toward a stronger 2028.
Citigroup struck a more upbeat tone. Analyst Ronald Josey reiterated a Buy rating and an $800 price target, highlighting that Muse has generated more than 6.6 million downloads since its September 8 launch and has been the most downloaded app for 16 consecutive days. Citi estimates the assistant could eventually produce more than $27 billion in annual revenue at scale, including roughly $23 billion from transaction-related revenue and about $4.5 billion from subscriptions. Internal data reviewed by The Information indicated more than 3 million weekly users send at least one prompt, while over 1 million daily users do so. Citi separately cited 1.8 million daily active users.
Meta’s core advertising business remains supportive. Deutsche Bank said its latest channel checks were strongest for Meta and Alphabet, citing improved campaign performance, a more valuable Reels and Stories inventory mix, and growing adoption of AI advertising tools. Meta faces competition in the personal AI agent market from OpenAI’s ChatGPT Dots, Google’s Gemini, and Anthropic’s Claude. For the second quarter, Meta reported revenue of $60.80 billion, up 28% year over year, while costs and expenses rose 55% to $42.03 billion. The company expects full-year 2026 expenses of $165 billion to $169 billion and capital expenditures of $130 billion to $145 billion.
Institutional investors continued to add exposure. Central Pacific Bank Trust Division increased its Meta stake by 65% last quarter, buying 2,817 additional shares to reach 7,169 shares worth about $5.2 million. Smaller funds also added positions, and institutions and hedge funds now own nearly 80% of the stock. Insiders remained net sellers, with CEO Mark Zuckerberg and COO Javier Olivan selling shares in September under pre-set plans, totaling nearly $99.9 million over three months. Meta shares were little changed on Tuesday, trading near $743, close to their 12-month high of $779.82. The average analyst price target sits at $787.86, with targets ranging from $700 to $900.
