Truist Securities raised its price target on Meta Platforms to $1,000 from $763, matching the high end of Wall Street estimates after citing early traction for the company's Muse AI agent.
In a note to clients on Tuesday, analyst Youssef Squali maintained a Buy rating on the stock and extended his discounted cash flow valuation through the end of 2027. The revision reflects a new contribution from Muse in his outer-year estimates, with a base case projecting $28.5 billion in incremental revenue by 2030.
Meta shares have climbed 21% since Muse launched on Sept. 8, outpacing a 2% gain for the S&P 500 over the same period. Squali attributed this divergence to AI enhancing performance across advertising, wearables and Muse, which he views as a driver for non-ad revenue through personal superintelligence and enterprise solutions.
Squali wrote that artificial intelligence is boosting performance in ads and wearables while Muse builds non-ad revenue by powering personal superintelligence and serving enterprise and small-to-medium businesses. He characterized Meta as a long-term winner in this sector.
For the current quarter, Squali forecasts revenue of $63.9 billion, a 25% year-over-year increase that sits at the top of management's $61 billion to $64 billion guidance range. This estimate also exceeds the consensus figure of $63.3 billion. He anticipates that cost per thousand impressions will rise by double digits, driven largely by the adoption of Meta's Advantage+ automated advertising suite.
Squali noted that Meta's growth is increasingly reliant on monetization and retention rather than acquiring new users. His third-quarter financial model incorporates an estimated $10 billion legal settlement with 48 state attorneys general, resulting in projected GAAP operating income of $11.7 billion.
Looking ahead to capital spending, Truist projects 2027 capital expenditure at $190 billion, representing a 32% year-over-year increase. This forecast is slightly below the current consensus estimate of $193 billion.