JPMorgan upgraded Meta to Overweight from Neutral and lifted its price target to $820 from $640, pointing to the company's frontier AI models and AI agents as a new growth path beyond advertising. Analyst Doug Anmuth projected 2027 and 2028 capital spending above consensus and set the target on a 2028 earnings estimate.
JPMorgan lifts Meta on AI agent bet
JPMorgan upgraded Meta Platforms to Overweight from Neutral and raised its price target to $820 from $640, arguing that the company's push into frontier AI models and AI agents opens a new avenue for growth beyond advertising. Analyst Doug Anmuth said Meta's superintelligence lab has essentially delivered on its goal of reaching the frontier within a year.
He pointed to an accelerating cadence of model releases culminating in Muse Spark 1.3, which he said is competitive with Claude and GPT models. Anmuth expects a coming model, dubbed Watermelon, to unlock further opportunities across consumer products, engagement, advertising and internal efficiency.
Muse agent gains early traction
The Muse agent has seen strong early traction, reaching as high as No. 3 in the U.S. app store on its second day. Monetization is not a near-term priority, but Anmuth pointed to potential from commissions and subscriptions in a market he sized in the tens of trillions of dollars.
He also noted that there is still headroom in core advertising from better targeting and AI content creation. According to Investing.com: "there's still meaningful headroom in core advertising".
Capex forecast climbs above consensus
Anmuth projected Meta capital expenditure of $243 billion in 2027 and $284 billion in 2028, both above consensus. His $820 target rests on 23 times his 2028 EPS estimate of $35.44, which he said could prove conservative.
Source: Investing.com
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