Meta Platforms (META) stock is up over 7% after it delivered a solid Q4 beat. Attention is turning to whether META’s current valuation leaves room for upside. Jefferies weighed in after the report, with five-star analyst Brent Thill noting that META trades at roughly 21x forward earnings, compared with more than 28x for Alphabet (GOOGL). He stated that the gap is much wider than “historical norms,” suggesting the stock is priced at an unusually large discount.
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For context, Meta’s earnings came in at $8.88 per share on $59.89 billion in revenue, beating Wall Street’s expectations of $8.23 per share and $58.59 billion.
Jefferies Shrugs off Meta’s High Capex
Meta expects capital expenditures of up to $135 billion, nearly double last year’s level, underscoring how aggressively the company plans to invest in AI. Wall Street estimates suggest that kind of jump in capex could cut operating margins by almost 5% this year.
Even so, Thill argues that the worst of the margin pressure is already reflected in META’s stock price after its recent pullback. Meanwhile, even as Meta plans massive capital spending, it has scaled back spending on its metaverse division. Thill called that move a “positive sign,” saying it shows the company is keeping a closer eye on costs.
Additionally, Thill said Meta’s investments—especially in AI talent—are starting to pay off. To be precise, he noted that new text and image AI models expected in the first half of 2026 could shift the narrative around Meta’s AI strategy, particularly after the Llama 4 model failed to impress.
Thill Is Bullish on META Stock
Thill reiterated a Buy rating on META stock with a $910 price target, implying more than 35% upside from current levels. He added that much of the near-term pressure on the business appears to be already priced into the stock.
Overall, Thill said Meta’s revenue momentum and ongoing efficiency improvements should help offset higher operating costs, making the stock attractive to own into 2026.
What Is the Target Price for META?
On TipRanks, META stock has a consensus Strong Buy rating among 43 Wall Street analysts. That rating is based on 38 Buys and five Holds assigned in the last three months. The average META price target of $830.05, which implies 24% upside to the current levels.
