Bernstein Calls Meta the Top Consumer AI Play With Outperform Rating

Meta Platforms, Inc. (NASDAQ:META) is one of the  AI Stocks Hit with New Analyst Ratings. On August 26, Bernstein analyst Mark Shmulik gave his thoughts on digital ad winners, battleground stocks, and the major question of whether Meta can close the gap with Google. The firm has an Outperform rating on the stock with a $900 price target.

The firm is bullish on the stock considering its robust AI efforts. The tech giant’s core AI investment is paying off, but they come at a cost.

Nevertheless, it believes that Meta is the only publicly traded Consumer AI play that’s delivering real results, and that its believes that “core AI gains continue.”

“Meta’s revenue grew 22% Y/Y in Q2, and the Q3 revenue guidance of $47.5-50.5B, or 17-24% Y/Y (16-23% FxN), was far beyond the most bullish bogey. Impressions and price growth were both strong as AI efforts to drive deeper consumer engagement and improvement advertiser efficacy paid off. Meta’s Core AI investment is clearly paying off, but these investments come at a cost, with 2025 expense/CapEx guidance up by ~$1B/$2B, at the top end, respectively. Management also commented that expenses are likely growing 20%+ Y/Y in 2026 tied to all those AI hires and server depreciation, while CapEx is set to grow another $30B Y/Y to ~$100B.”

“If core performance can continue at this level and there’s visible progress towards Superintelligence with traction across any of Meta AI, Business messaging, or Wearables, there’s no telling what the ceiling is for Meta. Right now, in our view, Meta is really the only publicly traded Consumer AI play that’s delivering real results, and we’re believers core AI gains continue. The risk of overinvestment with Meta is an understandable risk, however Meta’s steep cuts to staffing and spending levels in 2022 when market conditions dictated are the market for a company’s response when required – we trust them to do the same if things stall out on the GenAI side. We remain Outperform.”

When asked about when Meta will catch Google in search, the firm stated that “Meta is on pace to catch Google Search in ad revenues by the end of 2026.”

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