Meta Stock Forecast: NASDAQ:META Poised for $900 on AI and Ad Surge

Meta Platforms (NASDAQ:META) Expands AI Footprint While Revenues Surge

Meta stock (NASDAQ:META) continues to dominate 2025 as it delivered Q2 revenue of $47.5 billion, up 22% year-over-year, with net income of $18.3 billion translating to diluted EPS of $7.14, a 20.9% beat above analyst estimates. Daily active people across Facebook, Instagram, Messenger, and WhatsApp reached 3.48 billion, covering nearly two-thirds of the global adult population. Ad impressions rose 11% YoY, while average ad prices increased 9%, proving that its AI-driven ad targeting has successfully offset Apple’s iOS privacy headwinds. The company’s short-form video product Reels grew engagement levels against TikTok, while Threads expanded monetization against X, highlighting a diversified ad growth engine. Operating margin in Q2 stood at 43%, above Q1’s 41% and near peak profitability.

Profitability and Cash Flow Support Heavy AI Spend

Meta’s trailing twelve-month net income reached $71.5 billion, with an outstanding 40% profit margin and a return on equity of 40.65%. Operating cash flow exceeded $102 billion, leaving room to sustain aggressive capital expenditures even as total 2025 expenses are projected between $114–$118 billion, up more than 20% YoY. Management indicated 2026 costs could climb toward $150 billion, driven primarily by data center expansion and infrastructure for AI workloads. Despite these commitments, free cash flow remains robust at $31.9 billion after capex, leaving Meta room for continued share buybacks and a modest dividend of $2.10 annually (0.28% yield).

Artificial Intelligence: Partnerships, Infrastructure, and Llama 5

AI remains the centerpiece of Meta’s long-term strategy. The company is preparing Llama 5, a new large language model to compete with Google’s Gemini and OpenAI’s GPT-5. Until then, Meta Superintelligence Labs has explored temporary licensing deals with Google and OpenAI to enhance chatbot performance and app integration. A $10 billion, six-year agreement with Google Cloud highlights how even rivals collaborate when compute demand outpaces internal capacity. Internally, Meta has invested heavily in AI talent, luring top engineers with record compensation packages, some reported near $1.5 billion. Recent reports note a pause in new AI hiring, but rather than weakness, it reflects a consolidation phase as leadership aligns elite teams to priority projects.

Revenue and EPS Forecasts Signal Continued Strength

Analysts expect 2025 revenue of $196 billion (+19% YoY) and EPS of $27.96 (+17% YoY). For 2026, estimates climb to $227.7 billion in revenue (+16%) and EPS of $29.88 (+7%). Long-term projections suggest revenue CAGR of 16% and EPS CAGR of 13% through 2027, keeping Meta ahead of the S&P 500. With Q2 EPS up 36% YoY, momentum suggests estimates could be revised upward. At a forward P/E of 27.9x, NASDAQ:META trades at a discount relative to growth peers when accounting for its nearly 40% operating margin and scale unmatched outside Alphabet.

Superintelligence Narrative and Market Psychology

Mark Zuckerberg has pivoted Meta’s growth story away from the metaverse to a superintelligence narrative. With a base of nearly 4 billion monthly active users, the company has a built-in distribution channel for deploying AI assistants across communication, commerce, and media. The scale of this opportunity differentiates Meta from startups or enterprise-only competitors. The market has rewarded this shift: shares are up 44% over the last 12 months, outperforming the S&P 500’s 16% gain. While investors remain cautious after the failed metaverse bet, the superintelligence story is considered far more practical, embedding AI seamlessly into existing apps instead of requiring consumer behavior changes.

Valuation and Insider Activity

At a market cap of $1.86 trillion and current price of $738/share, Meta trades below its 52-week high of $796. The average Wall Street target stands near $873, with bullish calls as high as $1,086, implying upside of 18–47% depending on execution. Insider transactions have shown limited selling compared with hedge fund moves like David Tepper’s Appaloosa cutting its META stake by 27% in Q2. By contrast, 58 of 67 analysts tracked by LSEG rate the stock a Buy or Strong Buy, reflecting confidence in AI monetization.

Buy, Sell, or Hold Verdict on NASDAQ:META

Meta Platforms combines accelerating revenue growth, fortress-like margins, and a compelling AI roadmap anchored in its unmatched user scale. Risks remain around regulatory scrutiny, expense inflation, and execution of superintelligence initiatives, but its fundamentals and narrative provide strong support for further gains. With valuation still reasonable at under 28x forward earnings and consensus targets implying a 20% rally toward $900+, NASDAQ:META earns a Buy rating, with dips into the $700–$720 range presenting attractive long-term entry points.

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