Meta Platforms (META) has spent most of 2026 trading near $648 while the business behind it delivered record quarterly revenue. That growing mismatch has drawn a wave of analysts who believe the stock is meaningfully underpriced.
Second-quarter revenue reached $60.8 billion, up 28% year over year, with a 31% operating margin, Meta’s earnings press release confirmed.
At a forward price-to-earnings (P/E) ratio of 19, the stock trades below the S&P 500’s approximately 22 times forward earnings.
Reaching $900 would require roughly 39% upside from current levels. Whether the target is realistic depends on how quickly Meta’s artificial intelligence spending produces revenue beyond its advertising business.
Meta’s AI ad engine is generating results the stock hasn’t priced in
Meta’s advertising technology is producing gains that rival any growth story in big tech. Internal model upgrades drove an 8.3% lift in ad clicks and a 15.7% conversion gain on Facebook last quarter, 24/7 Wall St reported.
Those gains powered Advantage Plus, Meta’s end-to-end advertising suite, past a $75 billion annual revenue run rate. Ad impressions across the Family of Apps rose 14% year over year, while average price climbed 12%, Meta’s press release revealed.
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More than 1 million businesses already use Meta’s AI-powered business agents weekly, and the company plans to move the tool behind paid subscription offerings in the coming months, Meta disclosed.
Consensus estimates project 2027 earnings per share (EPS) at $33.94, with the high end reaching $40.31. At $900, Meta would trade at 27 times the consensus figure, or 22 times the high-end estimate.
Meta’s $18 billion youth-safety settlement removes a legal cloud
One of the largest legal uncertainties hanging over Meta was lifted in late August.
The company settled youth social media addiction lawsuits for up to $18 billion over a decade, with new teen limits on Facebook and Instagram that Meta has turned into a competitive advantage.
Morgan Stanley analyst Brian Nowak noted that users under age 18 account for just 1% of Meta’s revenue, limiting the near-term financial hit from the restrictions.
With the overhang removed, management can redirect focus toward AI product launches, MarketBeat indicated.
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Morgan Stanley projects Meta’s AI pipeline could lift earnings by more than $10
Nowak maintains a $775 price target on Meta and expects a wave of new AI products to lift earnings after the $18 billion legal settlement cleared, a MarketBeat analysis reported.
His thesis rests on AI revenue streams the market has yet to price in, including agentic ad tools, subscriptions, and a neocloud computing business. Those products could lift Meta’s EPS by more than $10.
That figure would represent roughly a 34% increase over the company’s 2025 adjusted EPS of $29.68, or as much as 43% against GAAP EPS of $23.49, according to MarketBeat.
Meta CEO Mark Zuckerberg framed the company’s AI strategy as a dual investment that strengthens its ad engine while building new commercial lines.
<strong>AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities</strong>.
Meta carries a consensus “Strong Buy” rating from 62 analysts polled by S&P Global, with an average price target of $754.77, according to StockAnalysis.
What stands between Meta and a $900 stock price
Capital expenditures reached $31.1 billion in Q2 of 2026, up 82% year over year, and Reality Labs lost $4.62 billion in Q2 2026, up from $4.03 billion in the first quarter.
Meta’s Q2 2026 press release confirmed full-year 2026 capex guidance of $130 billion to $145 billion, underscoring the scale of the investment.
That spending compressed free cash flow to just $784 million last quarter, down from $8.55 billion a year earlier, according to the press release. Converting that capital into visible AI revenue by early 2027 is the defining test for the bull case.
Meta has cleared rallies of this size before, with the stock returning roughly 73% over the past five years and about 415% over the past decade, based on Meta Platforms trailing total returns from Yahoo Finance.
The company also guided third-quarter revenue to $61 billion to $64 billion, its press release confirmed.
What the next 90 days will reveal about Meta’s $900 case
Two near-term events will test whether the $900 case is more than math on paper.
Meta’s Connect 2026 event, which opens with a Mark Zuckerberg keynote on Sept. 23, is expected to showcase the company’s latest work in AI, AI glasses, and virtual reality, the product lines investors are watching for signs that the AI capex is translating into new revenue.
Third-quarter earnings in late October will offer the first concrete tests of whether the revenue growth signals held through the second half.
How the stock responds to both events will show whether the market’s year-long discount reflected justified caution or a mispricing that Wall Street’s most bullish analysts called early.
Related: Goldman Sachs analyst issues new Meta stock forecast
