Wells Fargo raised its Meta Platforms stock price target to $1,000 from $796 this week, representing a significant increase from the previous target. According to reports from CNBC and MarketWatch, the new figure ranks among the highest targets on Wall Street. From Meta's October 6 close of $738.88, the new target implies about 35% upside. The raise is analyst Ken Gawrelski's second increase in about two weeks, following his first move to $796 from $640 in late September. Since Muse's launch on September 8, Meta shares have gained nearly 21%, compared with a 1.5% rise in the S&P 500. The stock rose 0.2% to $743.01 during Tuesday's session, extending the advance as investors responded to the bullish analyst call. Wells Fargo reiterated their overweight rating of the stock, with Gawrelski writing that "Expect enthusiastic discussion of AI agent opportunities."
Meta's Muse AI assistant has achieved remarkable viral adoption, surpassing 3 million weekly users who send at least one prompt and more than 1 million daily active users doing the same, according to internal data reviewed by The Information. The app has held the top spot among free downloads on Apple's App Store for 16 consecutive days, with Citi analyst Ronald Josey noting that Muse surpassed 6.6 million downloads within that window. This viral momentum has transformed Gawrelski's outlook, with the analyst framing the current moment as the early innings of what could become Meta's next major product cycle. He expects 2028 as the inflection point when AI-driven revenue begins layering onto Meta's core advertising operations, positioning the company for what he described as "a consistent positive revisions story." After 2027, "expect Meta to be a consistent positive revisions story as market begins to layer in AI product revenue contributions in '28 and beyond," he added. Long term, Gawrelski sees Meta "as an accelerating growth story with emerging upside AI options in messaging, ad tools and new consumer applications."
Meta faces significant near-term headwinds with a $10 billion legal settlement charge expected to drag third-quarter earnings per share down to $3.72, according to Wells Fargo analysis. This compares unfavorably to the Wall Street consensus of $6.14 for the quarter. Gawrelski called for a "dose of caution" going into the company's third-quarter earnings, which are scheduled for later this month. The analyst anticipates a near-term hit to Meta's earnings due to litigation costs and a ramp-up of infrastructure spending to support Muse's product trajectory. Management is expected to set "muted expectations for near-term monetization" during upcoming earnings commentary, as the company pours capital into AI infrastructure before Muse begins generating meaningful revenue. However, Gawrelski expects commentary from Meta to set "muted expectations for near-term monetization" regarding Muse.
Wells Fargo's most upbeat scenario requires substantial infrastructure investments, with Gawrelski expecting operating expenses of $212 billion for 2027, well above the Wall Street consensus of $202 billion. He also anticipates $250 billion of capital expenditures for heavy infrastructure spending, representing a significant step up from the $130-145 billion in capex that Meta projects for 2026. Notably, Gawrelski removed 500 megawatts of capacity resales - representing roughly $5 billion in potential revenue - from his 2027 forecast, noting that the explosive growth of Muse means Meta will need to keep all of that processing power for itself. This translates to earnings per share of $31.18 for 2027, compared with a consensus estimate near $34. The bank cut its 2027 earnings estimate to $31.18 per share and forecasts $40.02 in 2028, when it expects AI product revenue to contribute more meaningfully.
The broader analyst community remains firmly positive on Meta, with LSEG data showing 56 of 63 analysts rate Meta as a buy or strong buy. The consensus price target stands at $787.86, with individual targets ranging from $700 to $900, according to MarketBeat. Wells Fargo's $1,000 price target is tied for the highest analysts covering the stock, LSEG and FactSet data show. Citi analyst Ronald Josey delivered an even more optimistic assessment, maintaining his Buy rating and $800 price objective, with his long-term projection seeing Muse generating more than $27 billion in revenue once fully scaled. Deutsche Bank added to the positive sentiment, reporting that its latest channel checks were strongest for Meta and Alphabet, citing improved campaign performance and growing adoption of Meta's AI advertising tools. Institutional capital continues flowing into Meta, with nearly 80% of outstanding shares now held by institutional investors and hedge funds.
