Meta Stock: The Market Is Punishing AI Spending. Here’s Why I’m Still Bullish

Meta Platforms (NASDAQ:META | META Price Prediction) is caught in a strange moment. The advertising machine is humming, daily users just hit 3.60 billion, and CEO Mark Zuckerberg is pouring capital into AI at a pace no other consumer internet company can match.

Yet shares are down 13.66% year to date and 27.31% over the last year. The market is punishing the AI bill. Can Meta shares reach $900 in 2026? Here is my read on the math.

The Real Reason Meta Is Down This Year

The business fundamentals remain intact. Q2 2026 revenue of $60.80 billion beat estimates, but EPS of $6.18 missed by 14.42% and snapped a six-quarter beat streak. Operating margin compressed to 31% from 43%. Free cash flow collapsed 91.31% to just $784 million as capex hit $30.12 billion.

Shares have fallen 11.93% in the past month and 4.36% in the past week. With a beta of 1.24, every AI capex headline swings the stock harder than the tape. A California legal fight described as carrying “astronomical” consequences is not helping sentiment either.

Wall Street Sees 33% Upside. Our Model Says More

Analysts carry an average target of $754.14, with 8 strong buys, 47 buys, 7 holds, and zero sells. That is 89% bullish. Our model puts the base case at $798.55, or 40.35% upside, with a bull case of $859.31 and a bear case of $699.33. Confidence is high at 0.9.

Analysts are anchoring on 2026 EPS pressure and undercounting the operating leverage embedded in that $40.09 forward EPS figure. Zuckerberg guided operating income above 2025 levels even with capex running at $130 to $145 billion. That signals a company on offense.

The Path to $900 Per Share

Reaching $900 from today’s price of $568.97 would require a gain of 58.2%. With forward EPS of $40.09, a price of $900 implies a forward P/E of 22x. Our base case of $798.55 already implies 17x, meaning the bold target needs about 5x of additional multiple expansion.

That is a stretch, but not fantasy. Three catalysts drive the move. First, ad revenue is compounding at 27% YoY with price per ad up 12%.

Second, Zuckerberg told investors “AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities.” He also said “we have quite a number of offers at a meaningful premium over what we paid for the compute”, which reframes capex as an appreciating asset (and the power, cooling, and networking suppliers on the other side of that check are the subject of a free report on seven AI infrastructure names worth a look).

Third, Advantage Plus is now at a $75 billion annual revenue run rate. Regulatory losses from the 2026 youth trials are the real risk.

Where Meta Trades Today vs Its Earnings Power

At $568.97, Meta trades at roughly 14x forward earnings. That is well below the S&P 500 and cheaper than any major mega-cap platform peer. Shares sit at the low end of a $519.78 to $788.22 52-week range. The stock has returned 364.47% over ten years.

When a company grows revenue 27.96% and trades at 14x forward, either the market is right about permanent margin damage or the multiple is a coiled spring. I lean toward the spring.

Is $900 Realistic? My Verdict

Reaching $900 needs a 58.2% gain from here, a stretch inside a single year.

It gets real if three things go right: Q3 revenue lands at the high end of the $61 to $64 billion guide, Muse Spark 1.3 ships and demonstrates enterprise pull, and operating margin stabilizes above 31% as severance rolls off. A large adverse legal ruling in the youth trials would derail it. We’ve outlined the blueprint for how Meta Platforms could reach $900 in 2026.

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