Meta Shares Gain as Analysts Identify Significant Upside Potential

Meta Platforms Inc. saw its stock advance strongly on Thursday, climbing approximately 2% to trade near $662. This move higher comes despite emerging regulatory scrutiny over certain advertising practices, as market analysts reaffirm their confidence in the social media giant's trajectory. Bank of America Securities has reiterated its "Buy" rating, attaching a price target of $810. This projection implies a potential upside of over 20% from current trading levels.

The company's robust financial position provides a solid foundation. Meta closed its third quarter of 2025 with revenue of $51.24 billion, representing a year-over-year increase of 26.2%. Earnings per share for the quarter came in at $7.25, surpassing market expectations. The firm maintains substantial liquidity of approximately $44.5 billion, generated an operating cash flow of $30 billion in Q3, and pays a quarterly dividend of $0.525 per share. This financial health has attracted institutional investors; firms like ARS Wealth Advisors Group have recently increased their holdings significantly.

Currently, the stock trades notably below its 52-week high of around $796, which was reached in August 2025. Analyst Justin Post of Bank of America points to improved profit expectations for 2026 and 2027 as primary catalysts. Based on a consensus earnings estimate of $30.12 per share for 2026 and historical valuation multiples, a calculated price target would be approximately $761.

Strategic AI Investments and Hardware Focus

A major strategic shift is underway in Meta's hardware approach. The company has paused plans to license its Horizon operating system to third-party manufacturers such as Asus and Lenovo. Instead, it is now concentrating fully on developing its own proprietary hardware for the VR/AR market. Concurrently, the Ray-Ban Meta Smartglasses have received the v21 software update, introducing a "Conversation Focus" feature for noise filtering and deeper Spotify integration.

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

Meta's substantial investments in artificial intelligence infrastructure are a key focus, with plans to allocate roughly $72 billion toward this area in 2025 alone. A significant development within this strategy is the "TorchTPU" project, a partnership with Google. This collaboration aims to make Google's Tensor Processing Units (TPUs) compatible with Meta's PyTorch framework. The initiative has dual objectives: reducing AI inference costs through improved hardware-software integration and decreasing reliance on Nvidia's dominant CUDA ecosystem. Such efforts could lessen dependence on external hardware suppliers and improve long-term cost structures.

Furthermore, the planned launch of its next major large language model in the first half of 2026 is viewed by analysts as a crucial upcoming catalyst for growth.

Regulatory Scrutiny on Advertising Platforms

Meta faces renewed legal challenges concerning its advertising platforms. A coalition of 35 U.S. state attorneys general is urging the company to take more decisive action against fraudulent advertisements on Facebook and Instagram. The complaints specifically highlight AI-generated ads for weight-loss medications. These advertisements allegedly use deepfake technology to create fabricated endorsements from medical professionals and promise unrealistic results, such as losing over 90 kilograms (approximately 198 pounds) within three weeks. The authorities are demanding stricter algorithmic control over advertising content.