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BofA lifts Meta price target to $710 on AI growth, cost discipline

Investing.com — Bank of America increased its price target for Meta Platforms (NASDAQ:META) to $710 from $660, driven by the company’s expanding AI capabilities, revenue potential, and continued cost discipline. The stock rose 65% in 2024, outperforming the NASDAQ and Alphabet (NASDAQ:GOOGL), and remains a top pick at BofA for 2025 amid optimism around AI-driven ad revenues and messaging monetization.

“With a stable macro backdrop, a growing AI contribution to ad revenues, ramping messaging revenues, and continued cost discipline, recent headcount cuts, we remain positive on the stock in 2025,” analyst said.

Meta’s estimated $58 billion in 2025 capital expenditures highlights its focus on AI, with new tools for content and ad creation, automated messaging, and coding efficiencies expected to boost returns. Short-term gains could come from AI-driven ad revenue growth, while long-term investors may focus on capex ROI.

BofA identified potential risks, including revenue deceleration, regulatory pressures, and rising competition from platforms like TikTok and emerging e-commerce players. Though, Meta’s adjusted valuation of 17 times 2026 EPS, which excludes Metaverse losses, remains below the S&P 500 average, supporting a “Buy” rating.

“For longer-term investors, the perceived ROI on Meta’s growing AI investment, roughly $58 bln estimated capex in 2025, will be a key criterion for the stock,” analyst added.

This post appeared first on investing.com
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