AI Cycles Support Long-Term View on META Despite Near-Term Pressure

Meta Platforms, Inc. (NASDAQ:META) is one of the AI Stocks in Focus on Wall Street. On January 26, KeyBanc analyst Justin Patterson lowered the price target on the stock to $835.00 (from $875.00) while maintaining an Overweight rating. The firm anticipates META to benefit from AI product cycles in 2026 alongside Alphabet (GOOGL).

We believe OW-rated Alphabet (raise PT to $360) and OW-rated Meta (lower PT to $835) should benefit from AI product cycles in 2026.

While Alphabet’s AI upside is increasingly reflected in its valuation, KeyBanc noted how Meta’s shares price in investment and ROI concerns. The divergence is evident in Meta’s valuation, currently trading at its widest P/E discount to Alphabet (GOOGL) since 2002.

Looking ahead, the firm anticipates revenue forecasts for both companies to remain ahead of consensus estimates.

With our 2026E/2027E revenue estimates ahead of consensus for both GOOGL (1%/3%) and META (1%/2%), our view is both stocks can work over the year.

As such, the near-term sentiment on Meta remains argumentative due to concerns about spending levels. Investors fear that operating expenses could exceed $160 billion. The firm’s own model projects $157 billion in operating expenses and $120 billion in capital expenditures.

Nevertheless, Keybanc sees product momentum in the spring supporting stronger revenue growth into 2027.

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Disclosure: None.