Meta Stock Added to Best Ideas List with $920 Target – Is a Shift In Sentiment Coming?

Meta Platforms Inc. (NASDAQ: META) has garnered a renewed vote of confidence from Wedbush Securities, securing a spot on the firm's Best Ideas List while maintaining an Outperform rating and a price target of $920. This endorsement comes amidst a complex market sentiment shaped by both the company's robust performance and investor apprehension surrounding increased spending.

Wedbush's decision is underpinned by Meta’s strong performance in its core advertising business, coupled with promising advancements in Meta AI and Superintelligence Labs. The firm also highlights the ongoing rollout of new AI-infused hardware as a significant catalyst. While acknowledging investor concerns regarding the company's increased expense and capital expenditure trajectory, Wedbush believes the recent pullback in shares presents a compelling risk/reward scenario with limited downside potential.

Meta's financial health remains robust, a key factor in analyst confidence. The company demonstrates strong profitability and a solid balance sheet, indicating a low risk of financial distress.

Analyst sentiment broadly aligns with Wedbush's optimism. Cantor Fitzgerald, for example, reiterated an “Overweight” rating with a $920 price target earlier in October, reinforcing the bullish outlook among some analysts.

The overall consensus rating is a “Strong Buy” with an average price target of $825.75, suggesting an 11.84% upside from current levels.

The market's mixed response to Meta stems from concerns about the company's strategic shift towards increased investment in AI initiatives and capital expenditures, raising questions about near-term profitability. However, these investments are also viewed as critical for long-term growth and maintaining a competitive edge in the evolving technology landscape.

Meta's stock has heavily underperformed this year, with a 1.63% gain YTD paling in comparison to the Nasdaq 100, which has put up gains of 21.65% on the period. The 25%+ pullback from highs also raises questions, but ones which Wedbush feel will be more than answered in upcoming quarters.