Meta’s Hidden Engine: A 35% Upside Driven by Messaging and AI?

Meta Platforms is navigating a pivotal strategic shift, with its future growth potentially hinging on assets beyond its flagship social networks. While regulatory challenges persist, analysts are pinpointing a major untapped revenue stream within the company that could redefine its valuation.

A significant strategic maneuver is reportedly underway in Meta's artificial intelligence operations. According to industry reports, the company is in discussions with Alphabet regarding the use of Tensor Processing Units (TPUs) to train its AI models. This move signals a deliberate effort to reduce reliance on Nvidia's costly H100 and Blackwell chips.

The potential advantages of this multi-vendor approach are clear:
* Cost Management: It could help temper the soaring infrastructure expenditures associated with the AI arms race.
* Supply Chain Resilience: Diversifying hardware suppliers mitigates risk in a critical and competitive sector.

This initiative comes as Meta has elevated its 2025 investment forecast to a staggering $70 to $72 billion, underscoring CEO Mark Zuckerberg's commitment to being a frontrunner in AI. However, capital expenditures of this magnitude continue to test investor patience, demanding visible returns.

WhatsApp: The Multi-Billion Dollar Opportunity

The core of the bullish thesis, as highlighted by Evercore ISI, centers on WhatsApp. Analyst Mark Mahaney identifies the messaging platform as a potential "amplification catalyst" for the entire corporation. His projection suggests WhatsApp could generate $40 billion in revenue by 2030, contributing approximately $20 billion to operating income.

Should investors sell immediately? Or is it worth buying Meta?

This performance would boost earnings per share by an estimated $7.15. With 3.5 billion daily active users currently generating minimal revenue, the monetization path involves business messaging, premium features, and targeted advertising—transforming the communication tool into a substantial profit center. Based on this outlook, Evercore ISI reaffirms its "Outperform" rating with a $875 price target, implying a roughly 35% increase from recent levels near $645.

Regulatory Headwinds Persist Amid Strong Results

Meta's financial performance remains robust. For the third quarter of 2025, revenue surged 26% to $51.2 billion, with operating profit climbing 18% to $20.5 billion. Nevertheless, the company continues to face significant legal and regulatory setbacks that cloud this progress:
* Spain: A court levied a €479 million fine against Meta for violations of GDPR data rules related to media publishers.
* United States: The company agreed to a $190 million settlement with shareholders over data privacy concerns.

These recurring issues serve as a reminder of the ongoing regulatory scrutiny that poses a persistent risk to the company's valuation.

The Investment Calculus

The central question for the market is whether the massive short-term investments in AI infrastructure will be justified by the long-term monetization of Meta's vast user base, including WhatsApp's 3.5 billion daily users. Current analyst sentiment indicates that institutional investors may tolerate the explosion in capital expenditures, provided the company maintains its double-digit revenue growth.

The coming quarters will be critical in determining if the "WhatsApp turbocharge" ignites as forecast and if AI-enhanced advertising meets elevated expectations. For now, Meta's shares appear to be in a consolidation phase, with the potential for a significant breakout if its strategic bets begin to pay off.