Meta Stock Gains Despite Price Target Cut – What Is The Latest?

Meta Platforms stock (NASDAQ: META) climbed 1.67% to $669.78 today despite Roth Capital lowering its price target on the social media giant, underscoring continued market confidence in the company's long-term trajectory even as near-term investment costs mount.

Roth Capital reduced its price target to $800 from $845 while maintaining a Buy rating ahead of Meta's fourth-quarter earnings release.

The revision reflects the firm's recognition of Meta's position in what analysts describe as a generational investment cycle, with substantial capital flowing into AI infrastructure, custom silicon development, data centers, and AI-driven operational expenditures.

Despite the lower target, the $800 price point still implies approximately 20% upside from current levels, signaling persistent optimism about the company's ability to monetize these investments.

The analyst noted that Meta's industry-leading revenue growth, scale advantages, and engagement intensity justify a premium long-term valuation multiple. First-half catalysts include the anticipated launch of Frontier AI models from the newly formed TBD Labs, the ongoing expansion of Andromeda and Generative Ads Model capabilities, and the likely inauguration of the Prometheus data center in Ohio.

These developments are expected to offset tougher year-over-year comparisons, with tentpole events including the FIFA World Cup, Winter Olympics, and U.S. Midterm Elections potentially driving advertising demand.

Meta's recent financial performance has provided ammunition for the bullish case.

The company reported fourth-quarter earnings of $8.02 per share, surpassing consensus estimates of $6.68 and marking a 50.5% year-over-year increase. Revenues reached $48.39 billion, exceeding estimates by 3.02% and reflecting 20.6% year-over-year growth. Advertising revenues, which form the backbone of Meta's business model, are anticipated to continue their upward trajectory, with consensus estimates pointing to $45.43 billion in the fourth quarter, representing 17.4% year-over-year growth.

The average one-year price target among analysts stands at $852.71, suggesting potential upside of approximately 28.9% from current trading levels. This consensus view indicates that while near-term spending pressures have prompted tactical adjustments to price targets, the strategic rationale for Meta's AI and infrastructure investments remains intact.

Markets appear to be weighing the company's proven ability to generate substantial cash flows against the elevated capital intensity of its current investment phase, with Monday's price action suggesting confidence that management's strategy will ultimately deliver returns that justify today's valuations.