Meta Platforms trades 26% below Wall Street's average price target after a post-earnings selloff triggered by soaring AI infrastructure spending. Analysts remain overwhelmingly bullish, with 55 of 62 rating the stock a Buy and Rosenblatt Securities holding a Street-high target of $1,117.
Meta Platforms shares trade at $578.85, 26% below Wall Street's average price target of $754.14. Rosenblatt Securities carries a Street-high target of $1,117, implying substantial upside from current levels. Despite the gap, analyst conviction has not wavered.
A $31 billion capex bill broke the setup
Second-quarter 2026 earnings triggered the selloff. Meta posted diluted EPS of $6.18 against a $7.2173 consensus, a 14.42% miss that snapped a six-quarter beat streak. Revenue beat, however, rising to $60.8 billion, up 27.96% year over year.
Operating margin compressed to 31% from 43% a year earlier, hit by $2.4 billion in legal charges and $1.2 billion in severance. Capex ran $31.1 billion in the quarter alone, and free cash flow collapsed to $784 million, down 91.31%.
Management raised 2026 expense guidance to $165 billion to $169 billion and narrowed capex higher to $130 billion to $145 billion. As a result, the stock fell 7.95% on the day.
Why 55 of 62 analysts are sticking with the story
Analysts frame the capex as strategic offense rather than overreach. Rosenblatt's Barton Crockett describes Meta's agentic AI push for small and medium businesses, anchored by the Manus acquisition and WhatsApp distribution, as potentially comparable in long-term value to the Instagram and WhatsApp deals. He also points to 7.7 gigawatts of nuclear power purchase agreements with TerraPower, Oklo, Vistra, and Constellation Energy that secure clean energy for the Meta Compute buildout.
Zuckerberg cited a 60% jump in daily Meta AI interactions since integrating Muse Spark, an Advantage+ annual run rate above $75 billion, and more than one million businesses already using Meta business agents on WhatsApp and Messenger. The consensus reflects that conviction: 55 Buys, 7 Holds, and no Sells, with no analyst flipping bearish after the quarter.
How Meta stacks up against its ad peers
Meta stands alone as the outlier within the digital ad peer group. Alphabet trades at $343.54, up 9.9% year to date, with a $428.04 target backed by 58 Buys, 6 Holds, and no Sells. Reddit sits at $153.45, down 33.2% year to date, while Pinterest trades near $22.90, down 11.6% year to date.
The largest implied upside sits with Reddit, but Meta stands out on conviction: a near-unanimous Buy tilt on a $1.28 trillion business still growing 28%.
What the numbers say
Meta is down 12.16% year to date and 26.49% over the past twelve months, while the S&P 500 is up 13.28% year to date. Valuation still looks reasonable given the growth: a trailing P/E of 22, a forward P/E of 20, and revenue expanding 28% year over year.
The bull case holds if the AI capex converts to durable, high-margin revenue within two to three years, with margins stabilizing near 31% and free cash flow recovering after the buildout. The bear case strengthens if capex keeps expanding without matching returns, and compressed free cash flow into 2027 leaves room for multiple compression.
Source: 24/7 Wall St.
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