Categories: News

Meta Stock Update: Price Movement, Earnings, and Analyst Insights

Meta Platforms (META), after delivering solid Q4 2025 and full-year results with strong ad revenue and user growth, saw its stock price pressured due to soaring expenses tied to AI investments and infrastructure. Analysts nonetheless remain largely bullish, highlighting improving monetization and long-term upside from AI-driven tools and ad formats—though caution lingers around expenses and capex trends.

Q4 2025 and Full-Year Performance: Growth Amid Rising Costs

Meta’s Q4 2025 revenue reached approximately $59.9 billion, marking a 24% year-over-year increase, while net income rose about 9% to $22.8 billion. Diluted EPS climbed 11% to $8.88 .

For the full year, Meta generated $201 billion in revenue (up 22%) with operating income at $83.3 billion and net income slightly declining to $60.5 billion due to higher taxes and spending . Ad delivery remained robust—impressions rose 18% in Q4 and 12% across the year, while ad pricing increased 6% in Q4 and 9% annually .

However, costs surged: Q4 expenses jumped 40% to about $35.1 billion, and annual costs rose 24% to $117.7 billion, driven by AI infrastructure, R&D, and staffing . Capex for 2025 hit $72.2 billion, with free cash flow for the year down to $43.6 billion .

Meta estimates Q1 2026 revenue between $53.5 and $56.5 billion, and signals further expense and infrastructure ramp-up in 2026 .

Stock Reaction and Price Movement

Following the Q4 report, Meta’s stock dipped nearly 1% during the trading day, then rose about 5% in after-hours trades on the earnings beat .

Earlier in Q3 2025, Meta’s share price fell sharply (around 6–11%) after investors reacted adversely to a one-time tax charge and elevated 2026 capex guidance . These concerns highlighted the tension between strong operational performance and rising financial risk from aggressive AI investment.

Analyst Sentiment: Bullish Across the Board

Despite expense concerns, analysts remain optimistic:

TipRanks shows a strong Buy consensus with a 12-month average price target of about $829.78 (implying upside from ~$669) .
Jeffrey Wlodarczak (Pivotal Research) holds a Buy with a $910 target, calling Q4 and Q1 guidance “unquestionably strong” and viewing increased capex as de-risked by stronger revenue .
Shweta Khajuria (Wolfe Research) also maintains Buy with an $850 target, expecting mid‑20% revenue growth in 2026 and manageable Reality Labs losses .
Citi’s Ronald Josey reiterates Buy with $850 target, citing strong engagement and monetization via Reels, Business AI, and WhatsApp growth .
Justin Post (Bank of America) stands firm on Buy with an $885 target, noting AI-driven ad improvements and supportive Q4 results .
Wedbush’s Scott Devitt lowered his target to $880 from $920 but calls Meta his top ad pick in 2026 .
Bank of America’s Justin Post retained a Buy target of $810, viewing LLM deployment as a near-term catalyst amid elevated expenses .
Rothschild & Co Redburn raised Meta to Buy from Neutral, targeting $900 and forecasting 18% annual revenue growth through 2028. They highlight Meta’s dominant ad infrastructure and long-term AI monetization opportunities .

Overall, Wall Street’s consensus remains upbeat: TipRanks shows roughly 36 Buys, six Holds, and a single Sell, with an average target near $829 .

Key Themes: AI Investment vs. Revenue Upside

AI Spending: Pressure and Payoff

Meta’s aggressive investment in AI infrastructure, talent, and data centers is the key story. Capex surged past $70 billion in 2025 with more planned for 2026 .

Analysts view these investments as necessary to drive new revenue streams—agent tools, Business AI, LLMs, video, messaging, and engagement products like Reels and Threads .

Ad Performance and Engagement

Meta’s ad business remains strong. Expanded impressions, better pricing, and AI-powered ad targeting continue to lift performance across platforms .

Risks in Focus

Investor unease centers on narrowing free cash flow due to heavy spending. Predictions suggest FCF could fall by over 40% in 2026 if capex ramps steeply while revenue growth slows .

Legal and regulatory headwinds in the U.S. and EU also loom as persistent risks .

Summary Table: Key Numbers & Targets

Conclusion

Meta’s latest performance reflects a company scaling rapidly with strong ad growth and expanding user engagement, while simultaneously investing heavily in AI-driven infrastructure. Analysts generally view expenses as measured steps toward a broader AI monetization strategy—though free cash flow, margin pressures, and regulatory scrutiny remain real concerns.

For investors, near-term volatility may persist. But those focused on long-term transformation via AI and ad innovation see considerable upside. Watching whether Meta’s revenue acceleration continues to outpace spending will be key to assessing stock momentum.

Let me know if you’d like to explore segmented forecasts, compare Meta with its peers, or follow the upcoming Q1 2026 earnings updates.

Debra Phillips

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