Meta PT Cut to $720 as Analysts Flag Rising AI and Cloud Costs

Core Insights - Meta Platforms, Inc. is recognized as a significant AI stock on Wall Street, with Cantor Fitzgerald lowering its price target to $720 from $830 while maintaining an "Overweight" rating, reflecting a positive outlook but caution regarding near-term cost pressures [1][5] Financial Projections - Meta has guided for a substantial increase in operating expenses for FY26E, driven by factors such as depreciation, infrastructure costs, and investments in AI talent, with total operating expenses projected to reach $152 billion, representing a 30% year-over-year increase [2][5] - The firm anticipates an estimated $4 billion in incremental costs for FY26E, which translates to a 3 percentage point increase in year-over-year growth [4] Cloud Computing Commitments - Recent agreements with four cloud vendors (Google, Oracle, CRVW, and NBIS) are expected to elevate Meta's cloud computing expenses to over $40 billion, indicating a significant rise in future financial commitments that may pose challenges in 2026 [3][5] Investment Strategy - While Meta is seen as a potential investment opportunity, there are suggestions that other AI stocks may present greater upside potential with lower downside risk, indicating a competitive landscape in the AI sector [6]