Goldman Sachs lowered its price target on Meta Platforms to $725 from $815 while keeping a Buy rating, pointing to the company's infrastructure spending. The call follows a second-quarter 2026 report in which Meta beat on revenue but missed on earnings as AI costs rose.
Goldman Sachs cut its price target on Meta Platforms to $725 from $815 while maintaining a Buy rating, tying the change to the company's infrastructure spending.
Analyst Eric Sheridan cited Meta's second-quarter 2026 earnings report in the research note. The stock trades at $585.61, leaving the $1.49 trillion company significant upside to the new target.
Wolfe, BofA and Barclays also trimmed their targets
Meta reported revenue of $60.8 billion for the second quarter of 2026, surpassing analyst expectations of $60.19 billion. Adjusted earnings, however, came in at $6.18 per share against the anticipated $7.17, as costs surged with continued investment in AI infrastructure.
Goldman was not the only firm to move. Wolfe Research adjusted its price target to $700, BofA Securities to $810 and Barclays to $780, with all three maintaining positive ratings. They cited concerns over elevated capital expenditures, higher expenses and timing issues around artificial intelligence revenue generation, respectively.
Advertising carries the returns on AI spending
Sheridan's note frames Meta's core advertising business as a healthy avenue to demonstrate returns on that spending. Over the last twelve months, revenue grew 26% with an 82% gross profit margin.
The advertising line told a similar story in the quarter itself. Meta's ad business grew 26% in the second quarter, outperforming Google's growth by 10 percentage points when excluding foreign exchange effects.
No visibility on longer-term capital plans
Management highlighted that AI-driven compute investments continue to show returns in engagement, recommendations, ad performance and monetization. The company indicated AI agents could provide a pathway to scaling AI efforts outside its core business, and outlined opportunities in enterprise AI across foundational models, operational tools and direct compute monetization.
Those ambitions carry a bill. Management expressed interest in further monetization opportunities from AI, which would require continued spending across operating expenses and capital expenditures, while infrastructure investments remain elevated and targeted over the medium term.
Management did not provide visibility into longer-term capital plans. Third-quarter guidance came in ahead of expectations, even as operating income missed due to legal charges.
Source: Investing.com
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