Stifel analyst Mark Kelley has raised the price target for Meta Platforms Inc. (NASDAQ: META) from $550 to $590, while maintaining a Buy rating on the stock.
In his analysis, Kelley noted that Meta delivered strong second-quarter results, exceeding expectations across all geographic regions. The company also provided an optimistic revenue outlook for the third quarter, with mid-point projections suggesting a 650 basis point acceleration over a two-year period. Kelley attributed this growth to “healthy global advertising demand” on Meta’s platforms.
While total expenses for the year remain unchanged, Kelley pointed out that the lower end of the company’s capital expenditure outlook has been revised upward, which he described as “the only real wrinkle.” A significant portion of the company’s focus is on artificial intelligence, with Meta’s AI assistant expected to become the most widely used by the end of the year. Development of Llama 4, the next iteration of Meta’s AI model, is also underway with a launch planned for next year.
Kelley acknowledged the increase in capital expenditures as significant but believes Meta’s AI initiatives are already yielding positive results, including improved user engagement and enhanced advertising tools. He anticipates further benefits from AI developments like Llama and potential monetization of messaging platforms. Based on these factors, Kelley reiterated his Buy rating and increased the price target to $590.
Related topics: