Meta Platforms faced mixed analyst assessments on Wednesday as Goldman Sachs lowered its price target over concerns about rising operating expenses, while UBS and Guggenheim raised their targets on expectations of new artificial intelligence (AI) revenue opportunities.
All three firms maintained Buy ratings on the stock.
Meta shares META traded 3% lower on Wednesday, as investors weighed the company’s AI ambitions against the potential costs of expanding its infrastructure and developing new products.
The contrasting assessments come ahead of Meta’s third-quarter earnings report, scheduled for October 21, when investors are expected to seek further details on its AI investments and spending plans for 2027.
Goldman Sachs cuts Meta Price target on spending concerns
Goldman Sachs lowered its price target on Meta to $762 from $860, citing potential upward pressure on operating expenses in 2027.
The firm noted that Meta shares had rallied 37% from their August lows following the launch of its Muse AI agent and the release of the Wonder model.
However, Goldman flagged differences between its forecasts and Wall Street estimates as the company invests in product opportunities.
Despite the more cautious target, Goldman raised its revenue estimates for the next six to 18 months, citing favourable trends in digital advertising.
Concerns about spending are also emerging elsewhere on Wall Street.
FactSet consensus estimates put Meta’s 2027 capital expenditure at $193.88 billion, with analyst forecasts recently moving higher.
Guggenheim analyst Michael Morris raised his 2027 capital spending estimate to $225 billion from $203 billion.
He said the increase reflected Meta funding its AI opportunities, while warning that a rival breakthrough could leave the company in a cycle of continued investment.
Truist Securities analyst Youssef Squali also projected that Meta’s annual capital spending would rise 32% to $190 billion in 2027, up from his previous estimate of $180.11 billion.
UBS and Guggenheim see opportunities in AI monetization
UBS raised its price target on Meta to $884 from $715, pointing to the rollout of Business Agents and growing Muse usage as potential drivers of future revenue.
The firm identified two opportunities for generative AI monetization: generating revenue through WhatsApp and Messenger, and gaining market share in search advertising.
UBS also cited advertising checks indicating that AI-driven automation and recommendations were making strong incremental contributions, potentially helping Meta capture a larger share of digital advertising budgets.
Guggenheim raised its price target to $850 from $700.
Morris identified Muse usage and engagement as key factors that could influence investor sentiment ahead of the company’s earnings call.
Citing Apptopia data, Guggenheim said Muse reached 1.3 million daily average users over five weeks. That represents less than 0.05% of Meta’s 3.6 billion daily active user base.
Morris expects Meta to prioritise expanding usage before pursuing near-term monetization.
He believes businesses paying to reach consumers through their AI agents could become a revenue source, consistent with Meta’s existing advertising model.
Meta’s October 21 earnings in focus
Meta introduced Muse Wonder and Muse Wonder Full on October 12, describing them as its most capable AI models to date.
The launches have added to investor interest in the company’s AI strategy, but questions remain about the costs required to compete with rival models.
Bank of America analyst Justin Post said growing investor concerns about 2027 capital spending could pose a risk to the stock, particularly if Muse adoption requires additional infrastructure.
He maintained a Buy rating and an $810 price target.
Guggenheim expects Meta to continue scaling AI infrastructure to support advertising improvements and consumer AI products.
Morris forecasts that free cash flow will remain under pressure through 2028, with positive growth returning in 2029.
Meta’s upcoming earnings report is expected to provide further insight into its spending outlook and plans to turn AI investments into revenue.
With Wall Street split between spending concerns and AI upside, Meta is likely to stay a closely debated name on investment platforms heading into earnings.
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