Meta Platforms' AI Advancements Boost Target Price to $850 by Morgan Stanley

Morgan Stanley has raised Meta's target price to $850 from $750, maintaining an "overweight" rating. The analyst highlights Meta's advancements in GPU algorithm technology as a key driver of user engagement and profitability. The company reported Q2 revenue of $47.52 billion, a 22% YoY increase, and raised the lower end of its 2025 capital expenditure forecast to stay competitive in the AI race. Morgan Stanley adjusted its financial forecasts, anticipating a 3% revenue increase in 2025 and a 4% rise in 2026.

Morgan Stanley has boosted its target price for Meta Platforms, Inc. (NASDAQ:META) to $850, up from $750, while maintaining an "overweight" rating. The analyst, Brian Nowak, cited advancements in GPU algorithm technology as a key driver of user engagement and profitability. Meta's second-quarter results, which reported revenue of $47.52 billion, a 22% year-over-year increase, and exceeded market expectations, further underscored the company's technological prowess [1].

Meta's strategy of investing in core operations and long-term projects, funded by its improving core business, is seen as a positive by Morgan Stanley. The firm expects Meta to maintain its lead in the AI race by continuing to invest in talent, infrastructure, and data centers. The company's capital expenditure forecast for 2025 was raised to between $66 billion and $72 billion, reflecting its commitment to staying competitive in the AI sector [2].

The analyst adjusted Morgan Stanley's financial forecasts to anticipate a 3% revenue increase in 2025 and a 4% rise in 2026. The company's earnings per share (EPS) are projected to grow by 5% in 2025 and by 9% in 2026. These projections are driven by operational efficiency from algorithm optimization and Meta's AI investments, which are expected to generate meaningful returns [2].

Meta's second-quarter results and third-quarter guidance have also garnered positive re-ratings and price forecasts from other prominent Wall Street analysts. Rosenblatt, Bank of America, Cantor Fitzgerald, and Wedbush, among others, have all raised their price forecasts for Meta, reflecting a turnaround in investor sentiment following the company's strong financial performance [3].

In summary, Morgan Stanley's raised target price for Meta is a reflection of the company's robust financial performance and technological advancements, particularly in AI. The analyst's optimism is shared by other Wall Street firms, indicating a growing consensus on Meta's potential.

References:
[1] https://finance.yahoo.com/news/morgan-stanley-boosts-meta-target-095950430.html
[2] https://www.gurufocus.com/news/3039007/meta-platforms-meta-target-price-raised-by-morgan-stanley-amid-ai-advancements
[3] https://finance.yahoo.com/news/metas-q2-results-turn-skeptics-185036371.html