Analysts See Potential Drop After META Earnings as Opportunity

Core Viewpoint - Meta's stock has seen a decline of over 15% from its all-time high last August, but recent analyst upgrades suggest potential buying opportunities ahead of upcoming earnings [1][4]. Analyst Upgrades - Redburn upgraded Meta's stock from neutral to buy, setting a new price target of $900, which represents a 36% upside from the current trading price of approximately $669 [4]. - The overall sentiment among analysts is overwhelmingly bullish, with over 75% rating the stock as a buy or strong buy, and the average price target around $831.93 [10][11]. Earnings Expectations - Meta is scheduled to report its Q4 earnings on Wednesday, with analysts predicting a potential dip in share price to the mid-$500s if higher costs are reported [5][6]. - Rothschild analysts believe that any near-term weakness following the earnings report could present an ideal opportunity for investors to enter or add to their positions in Meta [6]. Long-term Outlook - Meta's significant capital expenditure (capex) on data centers, estimated at $600 billion, is seen as a necessary investment for competitiveness in AI, despite potential short-term downsides [7][8]. - Analysts express confidence in Meta's long-term value, suggesting that the current stock price disconnect may outweigh near-term risks [6][7]. Market Context - Other major tech stocks, including Alphabet and Microsoft, are also experiencing positive movements, indicating a broader recovery in the tech sector [2][3].