Meta Shares Present a Compelling Entry Point

Meta US30303M1027

Meta Platforms, Inc. concluded the trading week with significant momentum, building on a 5.7% gain from the previous session. The rally was bolstered by two major investment banks reaffirming their bullish outlook. Jefferies established a price target of $910, while HSBC set its target at $905. These projections suggest an upside potential of approximately 45% from recent levels, with analysts citing the stock's current undervaluation relative to its "Magnificent Seven" peers.

Market experts point to a notable valuation gap. Brent Thill, an analyst at Jefferies, labeled Meta as a "Top Pick" among large-cap technology stocks this week. He argued that with a forward P/E ratio hovering around 28.5, the shares trade at a discount to key competitors. This perspective comes after the stock retreated roughly 18-20% from its all-time high of $796 just weeks ago—a pullback Thill views as a strategic buying opportunity. HSBC echoed this sentiment, highlighting the core business's robust profitability, evidenced by gross margins of 82% and a 26% year-over-year growth in advertising revenue.

All eyes are now on the company's upcoming earnings report scheduled for January 28. Analysts are keenly awaiting clarity on the capital expenditure plan for 2026. Should management provide positive signals regarding the successful monetization of new ventures and disciplined cost control, the $700 per share threshold could come within reach. The technical picture has also improved, with the stock stabilizing and bouncing off its 200-day moving average. The consensus analyst price target currently sits in the $820 to $830 range.

Strategic Growth Initiatives

A concrete new growth driver is imminent. Next week, Meta will initiate the global monetization of its microblogging platform, Threads. With over 400 million monthly active users, this launch opens a substantial additional revenue stream for the social media giant.

Concurrently, the company has strengthened its leadership by appointing Dina Powell McCormick as its first President and Vice Chair. The former Goldman Sachs executive will oversee strategic partnerships and coordinate the expansion of Meta's AI infrastructure—a critical long-term project with an estimated scale of $600 billion.

Acknowledged Challenges

Despite the optimism, certain headwinds persist. The Reality Labs division continues to report significant losses, recording a $4.4 billion deficit in the most recent quarter. Furthermore, a planned $2 billion acquisition of AI startup Manus faces regulatory scrutiny. Chinese authorities, as reported on Friday, are examining the transaction for potential violations of technology export rules.

The forthcoming quarterly results will be pivotal in determining whether the current analyst confidence and recent price momentum can be sustained, making Meta a closely watched name in the technology sector.