Instagram’s 13 th consecutive month of growth helps Meta gain optimism, with target price maintained at $800
Despite concerns about increased capital expenditures, the market remains optimistic about Meta Platforms' prospects. Some institutions maintain a positive rating on Meta and keep the target stock price at US$800. The core basis is that user participation on its Instagram platform continues to strengthen. In addition to user participation, Meta’s AI strategy is also an important factor that is optimistic about the market. A recently exposed internal memo shows that Meta plans to deploy 7 gigawatts of AI computing infrastructure by 2026, doubling that to 14 gigawatts in 2027, and related expenditures may be as high as $145 billion. However, it is this computing power expansion plan that has raised concerns about capital expenditures. Some institutions have previously lowered the target price from US$825 to US$800, citing the expected significant increase in capital expenditures and estimating Meta's infrastructure expenditures in 2027 to be approximately US$200 billion, which may result in a free cash flow gap of approximately US$44 billion. Nonetheless, there are also views that the market may have overestimated the pressure of expansion on profits and underestimated the possibility of Meta converting computing power into third-party cloud revenue. Another agency also ranked Meta as its top choice for large-cap stocks and maintained a positive rating.