Meta Platforms Stock Added to Citi Watchlist Ahead of Earnings

Meta Platforms Inc. (NASDAQ: META) is drawing increased attention from analysts, particularly with Citigroup placing the stock on an “upside 90-day catalyst watch.” This move, coupled with a reiterated Buy rating and a price target of $915, signals confidence in the company's near-term prospects as markets anticipate the next earnings release.

The stock, currently trading around $712.00, a rise of 0.95% in the pre-market trading session. The stock also experienced a slight dip of approximately 0.04% (-$28.14) in recent trading, yet this hasn't deterred bullish sentiment from some analysts. Citi's optimism stems from observed improvements in user engagement and the growing effectiveness of Meta's newer advertising products. These factors are believed to be driving a greater return on advertising spend, positioning the company to potentially surpass revenue and earnings estimates.

Meta's strategic investments in artificial intelligence further bolster the long-term outlook. The planned acquisition of a significant stake in Scale AI for a substantial sum underscores Meta's commitment to advancing its AI capabilities. Scale AI's expertise in labeled training data is crucial for developing advanced AI tools, and the addition of Scale AI's CEO to lead a new “superintelligence” lab emphasizes the strategic importance of this investment. Additionally, the potential acquisition of chip startup Rivos highlights Meta's ambition to reduce reliance on external chip suppliers like Nvidia and control its AI hardware ecosystem. This move could optimize AI chip development, potentially leading to greater efficiency and cost savings.

The launch of “Vibes,” an AI-powered video feed, also presents an opportunity for Meta to innovate and diversify its content offerings. This platform allows users to create and share AI-generated videos, potentially attracting a wider audience and increased engagement across Meta's social media platforms. The global expansion of advertising on Threads, which now boasts over 320 million monthly users, further diversifies Meta's revenue streams and positions the platform as a significant player in the social media advertising landscape.

Meta's recent financial performance has been strong, with a 49% increase in profits and a 21% rise in revenue reported in Q4 2024. Q2 2025 results also demonstrated robust growth, with a 22% year-over-year increase in revenue and a 38% increase in operating income. The company has also been actively returning capital to shareholders through share repurchases and dividends.

Despite these positive developments, Meta faces ongoing challenges. Trade-war concerns and insider selling have, at times, exerted downward pressure on the stock price. The ongoing antitrust litigation, FTC v. Meta, adds a layer of regulatory scrutiny. This case examines whether Meta has accumulated monopoly power through anti-competitive mergers, particularly the acquisitions of Instagram and WhatsApp.

Analyst Summary: Bull and Bear Cases

Given the combination of positive catalysts, such as improving engagement and AI investments, alongside ongoing challenges, the market's reaction to the upcoming earnings report will be critical in determining whether Meta can sustain its upward trajectory and reach the $915 price target set by Citi. The stock's performance in the coming months will likely depend on Meta's ability to capitalize on its strategic initiatives while effectively navigating the regulatory landscape and macroeconomic headwinds.