Log In Get Started
Analyst Ratings January 23, 2026

Wells Fargo Adjusts Meta Platforms Price Target Amid Rising Operational Costs

Despite a downward revision of its price target, Wells Fargo maintains an Overweight rating on Meta amid robust gross margins and ongoing AI investments

By Ajmal Hussain META
Wells Fargo Adjusts Meta Platforms Price Target Amid Rising Operational Costs
META

Wells Fargo has lowered its price estimate for Meta Platforms to $754 per share from $795, reflecting increased operational and capital expenditure projections through 2026-2028. The adjustment is attributed to a re-evaluation of capacity contracts and highlights a timing mismatch related to Meta's intensive AI compute investments and the development of new use cases. Nevertheless, the firm upholds an Overweight rating, indicating confidence in Meta's long-term prospects despite short-term challenges. Other analysts echo mixed sentiments, with varied price targets and sustained Buy ratings. Meta's strong gross profit margin and recent solid quarterly performance, driven in part by Instagram Reels, continue to support a positive outlook amid regulatory and market uncertainties.

Key Points

  • Wells Fargo decreased Meta Platforms’ price target to $754 from $795 due to increased operational and capital expenditure forecasts through 2026-2028.
  • The adjustment is driven by a timing mismatch between Meta’s rapid AI compute capacity investments and the rollout of new use cases and products.
  • Despite the price target cut, Wells Fargo maintains an Overweight rating, reflecting confidence in Meta’s long-term growth potential supported by strong gross profit margins and recent solid quarterly performance involving Instagram Reels.

Wells Fargo has revised its price target for Meta Platforms Inc. (NASDAQ:META), lowering it from $795 to $754 per share, while continuing to assign the stock an Overweight rating. Meta’s current trading price stands at $658.12, and the company boasts a substantial market capitalization of $1.66 trillion alongside robust gross profit margins reaching 82.01%, based on InvestingPro data.

This reduction in price target, amounting to a $41 decrease, results primarily from a reassessment of Meta’s capacity contracts. Analyst Ken Gawrelski of Wells Fargo attributed this revision to a "meaningful upward revision to OpEx/CapEx estimates for 2026-2028," indicating rising expenditures forecasted over the medium term.

The firm identified a specific operational challenge involving a timing mismatch between Meta’s accelerated investments in artificial intelligence compute capacity and the company's current pace in discovering new use cases and products. This gap highlights the complexities in aligning its heavy AI infrastructure outlay with revenue-generating innovations in the short term.

Despite the lowered price target, Wells Fargo’s sustained Overweight rating reflects an underlying confidence in Meta’s strategic positioning and long-term earnings potential. Similarly, Stifel's recent advertising sector checks pointed to strong fourth-quarter results powered by Instagram Reels; however, Stifel has trimmed its price target for Meta to $785 from $875, while retaining a Buy rating.

In contrast, HSBC continues to endorse Meta with a Buy rating and a higher price target of $905, citing the company’s early and significant investments in artificial intelligence that bolster its advertising business revenues.

Meta is also navigating regulatory and legal developments. It secured a court suspension in Brazil regarding an antitrust proceeding linked to third-party AI tools on WhatsApp Business. Concurrently, the UK regulator Ofcom has initiated an investigation into whether Meta provided incomplete or inaccurate information about WhatsApp during a market review.

Amidst these company-specific factors, broader market dynamics are at play as TikTok’s U.S. operations await approval for sale to primarily American investors, sanctioned by both the Chinese and U.S. governments.

Risks

  • Rising operational and capital expenditures related to capacity contracts could pressure Meta’s profitability over the mid-term.
  • A timing mismatch between AI infrastructure investments and monetization of new products may pose near-term business challenges.
  • Ongoing legal and regulatory inquiries in Brazil and the UK create uncertainties that could impact Meta’s operations and market perception.

More from Analyst Ratings

Evercore ISI Sticks with Outperform on Apple, Sets $330 Target Backed by App Store and Services Strength Feb 2, 2026 Deutsche Bank Says AppLovin Risk-Reward Looks Better After Google’s Project Genie Shock Feb 2, 2026 Raymond James Sticks With Market Perform on American Airlines Despite Stronger Guidance and Faster Debt Paydown Feb 2, 2026 Mizuho Sticks with Outperform on Robinhood as UK ISA Launch Seen as Growth Lever Feb 2, 2026 Freedom Capital Lifts Caterpillar Price Target to $700 but Keeps Hold Rating Feb 2, 2026