Wells Fargo raised its price target on Meta Platforms to $1,000 from $796 and cut 500 megawatts of planned 2027 cloud-capacity resales, betting the company keeps that computing power for its Muse AI agent instead. The bank expects Muse to weigh on 2027 earnings before contributing more meaningfully in 2028.
Wells Fargo raises Meta price target to $1,000
Wells Fargo analysts raised their price target on Meta Platforms to $1,000 from $796 in a Tuesday note, implying nearly 35% upside to Monday's close.
At the same time, the analysts removed 500 megawatts of expected capacity resales from their 2027 estimates — roughly $5 billion of high-margin revenue — because Muse's early success makes it increasingly likely Meta will need that computing power for itself. The bank compared the setup to the early days of Reels in 2022, but said Muse could ultimately represent a much larger AI-driven product cycle.
From cloud ambitions to an AI agent
Just a couple of months ago, investor focus centered on whether Meta would launch a cloud business. Shares struggled for much of the year as the Facebook and Instagram parent poured large sums into AI infrastructure without giving Wall Street clear evidence of a payoff.
Meta CEO Mark Zuckerberg confirmed the cloud idea was on the table on July 1, giving the stock a brief reprieve. However, a lack of specifics weighed on shares again after Meta's second-quarter earnings miss and disappointing guidance in late July.
The narrative then shifted. On Aug. 26, Meta settled youth social media addiction litigation with attorneys general from across the nation for up to $18 billion, avoiding what Jim Cramer thought could be roughly $200 billion in potential fines from courtroom losses. On Sept. 8, Meta launched Muse, letting users hand off tasks such as sending emails, booking travel, and making purchases.
Muse drives Meta's best month since 2022
Meta shares surged 27% in September, the stock's best month since November 2022, compared with a 0.5% decline on the S&P 500. Zuckerberg then stepped up Meta's enterprise push: on Sept. 28 he announced the new Meta Enterprise Platform business and hired former MongoDB CEO CJ Desai to run it, followed the next day by the launch of Muse for Small Business.
According to CNBC Investing Club: "incredibly popular, and we know it's been downloaded and downloaded", Jim Cramer said during Tuesday's Morning Meeting.
The financial payoff, though, isn't expected right away. Wells Fargo estimates operating expenses could reach roughly $212 billion next year, above the current Wall Street consensus of $202 billion, as Meta keeps building out AI infrastructure. The bank cut its 2027 earnings estimate to $31.18 per share and views next year as a potential trough, before expecting earnings to climb to $40.02 per share in 2028 as AI product revenue contributes more meaningfully.
Still, Wells Fargo expects third-quarter revenue of roughly $64 billion, up 25% from a year earlier, near the high end of the company's guidance, giving Meta's advertising engine room to fund the long game.
Source: CNBC Investing Club
Trading involves risk.
Risk Disclaimer
