Meta Stock Surges on AI Growth Outlook—Analysts Predict More Upside Ahead

Meta Platforms Inc. (Nasdaq: META) shares added fresh momentum last week, edging up to $785 and pushing the social-media giant’s valuation to within striking distance of the $2 trillion mark—a milestone few public companies have reached. The latest leg higher follows July’s second-quarter earnings beat, where Meta posted 22 % year-over-year revenue growth to $40.7 billion and diluted EPS of $6.89, comfortably ahead of Wall Street estimates. AI SPENDING DRIVES THE BULL CASE Meta lifted its full-year 2025 capital-expenditure outlook to $66 – $72 billion, up $2 billion at the midpoint, citing heavier investment in proprietary AI infrastructure. Management reiterated that advanced large-language-model (LLM) training and inference will be “the single biggest driver” of spending through 2026, a stance that analysts say underpins the company’s long-term margin expansion thesis. MARKET REACTION & ANALYST TARGETS • 12-month price-target consensus now sits at roughly $822, implying ~5 % upside from Friday’s close. • The highest published target—$980—assumes Meta’s ad-impression growth stays above 25 % while Reality Labs losses narrow faster than expected. • Options markets reflect rising bullish sentiment: open interest in August 2025 $752.50 calls surged 18 % week-over-week. KEY DRIVERS TO WATCH 1. Advertising Re-Acceleration: Reels monetization efficiency has doubled year-on-year; any slowdown could pressure the stock’s premium multiple. 2. Metaverse Discipline: Reality Labs’ operating loss shrank to $8.7 billion YTD versus $9.4 billion a year ago; continued cost control could unlock incremental earnings power. 3. Regulatory Overhang: The FTC’s ongoing antitrust case remains a headline risk, though most analysts assign low probability to a forced divestiture. 4. AI Commercialization: Meta will demo its next-gen Llama 4 model at Connect 2025 in September. Clarity on an enterprise licensing plan is widely viewed as a potential catalyst. TECHNICAL PICTURE META trades 11 % above its 50-day moving average and 34 % above the 200-day, but the daily RSI at 71 hints at near-term overbought conditions. Support sits near $745, with breakout resistance at the $800 psychological level. BOTTOM LINE With ad demand rebounding, disciplined metaverse spend, and a ramping AI narrative, Meta stock continues to command investor attention. While the valuation is no longer cheap at 28 × forward earnings, the company’s robust cash flow, relentless share buybacks, and emerging AI monetization levers leave room for further upside—especially if management executes on its heightened capex plan without eroding margins.