Meta Platforms (META) fell over 10% after its Q1 earnings as the company raised its 2026 AI capex outlook to $125-$145 billion, well above Wall Street estimates. Apart from the jump in spending, the lack of stock buybacks and growing legal and regulatory pressures weighed on investor sentiment. Following the results, JPMorgan analyst Doug Anmuth downgraded Meta stock to Hold from Buy and cut the price target to $725 from $825.
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New trading tool for AMZN bullsIt is worth noting that Anmuth ranks 616 out of more than 12,210 analysts tracked by TipRanks. He has an overall success rate of 74% on Meta stock, with an average return per rating of 31.08% over a one-year timeframe.
Why JPMorgan Analyst Downgraded Meta Stock
- Rising Capex: Meta’s higher 2026 capex forecast has raised concerns about near-term free cash flow. Anmuth now expects Meta’s capex to jump 42% to $202 billion by 2027, which he says would push the company into negative free cash flow, about $4 billion in 2026 and $24 billion in 2027.
- Tougher AI Competition: The analyst believes Google (GOOGL) and Amazon (AMZN) are better positioned with more complete AI stacks and clearer monetization paths, putting competitive pressure on Meta.
- Uncertainty in AI Returns: While AI continues to boost ad performance, Anmuth is unsure how quickly Meta’s emerging “agentic” products and Muse models will generate meaningful revenue outside of advertising.
- Higher Long‑Term Expenses: Despite strong Q1 results, Meta’s rising infrastructure spending remains a major concern for profitability.
Overall, he expects META stock to remain under pressure until the company provides clearer details on how its AI products will drive revenue ahead.
Is Meta Stock a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Meta stock based on 31 Buys and seven Holds assigned in the past three months. Further, the average META price target of $826.66 per share implies 36.75% upside potential.
