Meta Platforms’ Strong Growth and AI Integration Justify Buy Rating Despite Elevated Capital Expenditures

In a report released today, Mark Zgutowicz from Benchmark Co. maintained a Buy rating on Meta Platforms (META – Research Report), with a price target of $640.00.

Mark Zgutowicz has given his Buy rating due to a combination of factors that highlight Meta Platforms’ strong performance and future potential. The company’s revenue guidance for the second quarter showed a significant year-over-year increase, which alleviated concerns about macroeconomic conditions and the exit of China-based advertisers. The impressive growth in ad pricing and the enhanced engagement on platforms like Facebook, Instagram, and Threads, driven by AI improvements, further underscore Meta’s robust market position.
Moreover, Meta’s strategic integration of advanced AI technologies, such as LLM tech and Advantage+ AI tools, has led to notable gains in personalized engagement and advertising efficiency. Despite the elevated capital expenditures projected for 2025, primarily for data center expansion to support core advertising and recommendation functions, the long-term growth prospects remain promising. The unchanged price target of $640 reflects confidence in Meta’s ability to navigate challenges and capitalize on emerging opportunities, justifying the Buy rating.

In another report released today, TD Cowen also maintained a Buy rating on the stock with a $700.00 price target.

Based on the recent corporate insider activity of 295 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of META in relation to earlier this year.