Meta Platforms (META) reported strong first-quarter 2026 earnings, but its shares still fell more than 10% in early trading on Thursday. The negative reaction was mainly driven by the company’s decision to raise its capital spending outlook between $125 billion and $145 billion, up from a previous forecast of $115 billion to $135 billion, as Meta continues to invest heavily in AI infrastructure. As a result, several analysts turned more cautious and lowered their price targets on META stock.
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For context, Meta reported first-quarter earnings per share of $10.44, far above Wall Street’s estimate of $6.67. Revenue also beat expectations, coming in at $56.31 billion compared with the $55.56 billion consensus forecast.
Guggenheim Lowers Meta Price Target to $800
Guggenheim’s five-star-rated analyst Michael Morris lowered his price target on META to $800 from $850, while keeping a Buy rating on the stock. He said Meta delivered strong Q1 results and believes its core advertising business remains solid. He also noted that management has built investor confidence around its heavy AI spending strategy.
However, unlike Alphabet (GOOGL), where AI and cloud investments create clear new revenue streams, Meta’s AI spending is mostly supporting its existing advertising business rather than generating separate revenue. Because of this, Guggenheim expects higher expenses and lower earnings and cash flow in 2027, leading to the lower price target.
Cantor Trims Meta Stock Target
Similarly, Cantor Fitzgerald’s top-rated analyst Deepak Mathivanan also reduced his price target on META to $750 from $850, while keeping a Buy rating.
He said Meta beat expectations in Q1 on both revenue and EBIT and also gave solid Q2 growth guidance despite broader economic concerns. The strong performance was supported by AI-driven improvements in user engagement and better ad performance. However, he said Meta’s higher spending is likely to bring back investor concerns about whether its heavy capital investments are generating strong enough returns. In simple terms, investors want to know if Meta’s large AI and infrastructure spending will lead to enough future profit growth.
Still, Mathivanan believes Meta’s core advertising business remains strong and sees multiple long-term opportunities to monetize these AI investments.
Is Meta a Good Stock to Buy Now?
On TipRanks, META stock has a consensus Strong Buy rating based on 31 Buys and seven Holds assigned in the last three months. The average META price target is $826.66, which implies an upside of 37% from current levels.
