MetaPlatforms, Inc. (NASDAQ:GOAL) is one of the AI stocks on the market radar. On December 18, BofA Securities reiterated its “Buy” rating on the stock with a price target of $810.00. Despite the recent multiple squeeze, the company is constructive on the stock driven by key near-term catalysts.
BoFA noted how Meta has lagged the broader market and some of its larger peers even though analysts have raised Meta’s earnings estimates for 2026. Investors have become cautious about the stock amid concerns about AI spending and rising operating costs.
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“So far in 2025, Meta stock (up 11% YoY) has underperformed the NASDAQ (up 18%) and Alphabet (up 56%). Although Meta’s consensus 2026 EPS estimates are up 16% from the start of 2025, the 2026 P/E multiple contracted in the second half of 2025 as AI sentiment softens. deteriorated and concerns about Opex for 2026 grew.
Despite these concerns, the firm sees Meta’s 2026 spending guidance and the launch of an LLM in the first half of 2026 as potential near-term catalysts. Looking ahead, investors will continue to focus on AI investment spending and the returns these investments can generate in core applications, advertising monetization and new business opportunities.
The firm also mentioned in its investor note how management’s comments on the costs of creating LLMs compared to licensing can help improve sentiment.
“Given Meta’s significant investment in developing an LLM (without a licensing revenue model), we believe management’s feedback on the cost of building an LLM versus licensing and the long-term benefits of an in-house LLM could be helpful in increasing confidence.”
Meta Platforms has been expanding its advertising capabilities and is also investing heavily in artificial intelligence and the metaverse.
While we recognize META’s potential as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.
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