Meta Platforms (META) stock has continued its slide as investor anxiety rises due to its massive artificial intelligence (AI) expenses. Analysts from Morgan Stanley (MS) still see more pain ahead, cutting their initial price target from $825 to $775 due to concerns about weakening advertising conditions, macroeconomic uncertainty, and investor caution regarding generative AI investments.
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META Faces Target Cut Amid AI and Ad Concerns
Brian Nowak, a Morgan Stanley analyst, noted that investors are becoming less confident in META due to the reduced digital advertising demand and uncertainty around the company’s heavy AI spending strategy. The company is spending heavily to build its AI infrastructure, and investors want to know if those costs will yield bigger profits soon.
The stock has dropped nearly 13% over the past week, reflecting broader concerns in the tech sector. Also, businesses are cutting their ad spending as the economy slows, and regulatory and macroeconomic uncertainty has added pressure. Morgan Stanley also reduced its 2026 advertising budget for META by 1% in anticipation of lower demand.
Broader Valuation Outlook Still Looks Optimistic
Although Morgan Stanley downgraded its price target for META, analysts are not completely bearish on the stock, as the revised $775 target suggests it could still climb about 44% from its current level of around $537. The stock is trading at about 15 times the firm’s 2027 earnings estimate, which is relatively lower than its long-term historical average.
The firm also noted that its forecasts do not include potential cost savings from workforce reductions, which could improve earnings performance if realized. So, while short pressure remains, the long-term picture could still support valuation recovery. Even Wall Street analysts tracked by TipRanks predict a 60% price rally to an average target of $864 from its present price.
Is META a Good Buy Right Now?
Analysts are paying close attention to Meta Platforms (META) as the company navigates pressure in the ad market alongside increased investment in artificial intelligence. Although the company has experienced recent share price declines, the stock continues to attract attention due to its strong position in digital advertising and ongoing expansion in the AI and tech sectors. Based on TipRanks data, META currently has a “Strong Buy” consensus, indicating positive analyst sentiment. For more information on META’s performance data, price targets, and analysts’ sentiments, visit TipRanks’ Stocks Comparison Center.
