Meta Platforms' Fourth AI Overhaul: BofA Remains Bullish with $900 Price Target

BofA Securities analyst Justin Post reiterated a Buy rating on Meta Platforms (META) with a $900 price target, despite the company's fourth AI reorganization. The firm believes Meta is well-positioned for AI, despite concerns over its execution. The company plans to divide its Superintelligence Labs into four distinct groups, and has a track record of executing new services. The analyst sees Meta as well-positioned for AI given its massive user base and tech infrastructure.

BofA Securities analyst Justin Post reiterated a Buy rating on Meta Platforms (META) with a $900 price target, despite the company's fourth AI reorganization. The firm believes Meta is well-positioned for AI, despite concerns over its execution. The company plans to divide its Superintelligence Labs into four distinct groups, and has a track record of executing new services. The analyst sees Meta as well-positioned for AI given its massive user base and tech infrastructure [3].

Meta Platforms, Inc. (META) has been undergoing significant organizational changes in its AI division. The company has recently reorganized its AI efforts into four distinct groups within the newly formed Meta Superintelligence Labs (MSL). These groups include TBD Lab, which will oversee large language models like the Llama tools; FAIR, an internal AI research lab focusing on long-term projects; Products and Applied Research, led by former GitHub CEO Nat Friedman, which will translate research into consumer products; and MSL Infra, focusing on the infrastructure needed to support Meta’s AI ambitions [2].

The reorganization comes amidst a series of internal challenges and shake-ups for Meta's AI efforts. Recent senior staff departures and the underwhelming reception of the Llama 4 model have led to this latest overhaul. The move signals CEO Mark Zuckerberg's aggressive push to fast-track the company's work on artificial general intelligence (AGI), which aims to create machines with human-like thought capabilities [2].

The restructuring is aimed at addressing concerns about being outpaced by rivals like OpenAI and Google DeepMind. Meta has been making significant investments in its AI infrastructure, including a recently reported $29 billion financing deal to expand its data centers in rural Louisiana. The company has also been actively recruiting top AI talent, with many high-profile researchers joining from competitors [2].

BofA Securities highlights that while concerns on the company’s AI execution are imminent, the firm believes that Meta boasts a good track record of execution of new services. The analyst noted that the frequency of reorganizations highlights both the strategic importance and potential complexities of Meta’s AI goals. While reshuffling may raise concerns on Meta’s AI execution, the AI opportunity is still very early, and Meta has a track record of execution around new services. The firm continues to see Meta as well positioned for AI given its massive user base and tech infrastructure, maintaining a Buy rating [3].

Meta's open-source identity has been central to its pitch, winning goodwill from developers and positioning it as a counterweight to “closed” AI ecosystems. Leaning on third-party models could dilute that message, but it also reflects a pragmatic approach to achieving its AI ambitions more quickly. The company may continue to evolve its flagship models while augmenting them with external ones for certain products or geographies, signaling a shift towards a hybrid strategy [1].

References:
[1] https://www.digit.in/features/general/why-meta-maybe-exploring-third-party-models-for-its-ai-products.html
[2] https://www.ainvest.com/news/meta-ai-org-undergoes-major-restructuring-superintelligence-labs-2508/
[3] https://ca.finance.yahoo.com/news/bofa-stays-bullish-meta-company-225825500.html