Wall Street Sees 29% Upside for Meta While Retail Investors Turn Skeptical
- Finance
ThePostMaster- 0
- 5 minutes read
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Shares of Meta Platforms (NASDAQ:META | META Price Prediction) are trading at $668.69, essentially flat over the past week with a 0.04% decline, coinciding with a noticeable shift in retail investor sentiment on platforms like Reddit and X. Social sentiment has cooled to 44.7 for the week ending February 12, down from 57.5 over the prior month. The mixed reaction follows Meta’s January 28 earnings beat and announcement of a $10 billion data center in Lebanon, Indiana, part of a broader $115-135 billion capex plan for 2026 focused on AI infrastructure.
Retail Traders Question the Spending Surge
Mentions of META on Reddit increased sharply following the company’s earnings announcement, with users expressing skepticism about whether the aggressive AI spending will deliver returns. While Meta beat expectations with $59.89 billion in Q4 revenue and $8.88 EPS, the capex guidance raised eyebrows. Traders on Reddit have been comparing Big Tech’s capital spending arms race, with discussions highlighting concerns about AI monetization execution.
Why does the massive spending Meta does on projects like AI and the metaverse not seem to affect the stock price?
by u/Embarrassed-Egg-545 in stocks
The tone of discussion has turned cautious, with retail investors pointing to specific concerns:
- Reality Labs continues to lose billions despite years of investment in VR and AI devices
- The $135 billion capex commitment represents nearly double the prior year’s spending
- Operating margins compressed to 41% from 48% due to a 40% cost increase
Wall Street Tells a Different Story
Despite retail skepticism, Wall Street analysts remain bullish. UBS raised its price target to $872 from $830 on January 29, while Cantor Fitzgerald lifted its target to $860 and Rothschild upgraded to Buy with a $900 target. The consensus among 67 analysts shows 11 Strong Buy and 51 Buy ratings, with an average target of $859.85, representing roughly 29% upside from current levels. Alphabet (NASDAQ:GOOGL), Meta’s primary competitor in digital advertising and AI infrastructure, faces similar dynamics with $175-185 billion in 2026 capex plans. For investors watching Meta, the key question is whether 24% revenue growth and improving AI monetization can absorb the infrastructure costs, or whether margin pressure will force a strategic rethink.
