Analyst downgrades Meta stock price target as the company ‘lags on AI'

Group 1 - Meta Platforms received a downgrade from 'Buy' to 'Neutral' by Arete analyst Rocco Strauss due to concerns about its ability to generate meaningful revenue from AI spending [1] - Arete's analysis indicates that while Meta's spending is increasing rapidly, revenue growth is not keeping pace, which could pressure margins [2] - Meta's projected capital expenditures for 2026 are expected to be between $115 billion and $135 billion, significantly higher than the $72.2 billion in 2025 [3][4] Group 2 - CEO Mark Zuckerberg expressed optimism about the company's future growth and infrastructure development during the earnings call [4] - Arete cautioned that the current spending cycle may reverse the cost discipline implemented after 2022, potentially affecting long-term financial health [5] - Following the price cut by Arete, the average Meta share price target for the next twelve months is now $858.86, indicating a collective expectation of a 28% increase in stock price [6]