After a Brutal Week, Wall Street says it’s time to buy the tech giant. It’s not often a stock drops hard and then immediately gets called a top buy. But that has happened with Meta Platforms (META).
After a punishing stretch that saw Meta tumble on legal losses, layoffs, and rising concerns about AI spending, one Wall Street giant is stepping in with a bold call. This is after a long bearish streak that saw the stock fall over 12% in just two days. A back-to-back drop of 8% on Thursday, 26th March, and 4% drop to close the week on 27th March.
After a bearish week, Morgan Stanley now says the selloff has created a rare opportunity.
In fact, analyst Brian Nowak didn’t hesitate. As per CNBC, he noted.
“Sentiment has troughed… It’s time to buy META.”
He lowered the stock’s price target from $825 to $775, suggesting roughly 50% upside from Friday’s close. That’s a strong statement for a stock surrounded by legal battles, layoffs, and massive AI spending.
The selloff looks ugly, but that’s the point
As per Yahoo Finance, Meta is down about 12% year-to-date, underperforming the broader market, and essentially flat over the past year.
And the reasons aren’t hard to find:
- Two major legal rulings, including a $375 million penalty tied to child safety concerns
- Ongoing lawsuits raising questions about social media regulation
- Hundreds of layoffs across key divisions
- Aggressive AI spending projected at up to $135 billion in 2026
That’s actually a lot of uncertainty hitting at once, and the market wasn’t late to respond to all of that.
But now, Morgan Stanley sees it differently. The firm argues that investor fear has peaked, and much of the downside is already priced in. And just as Buffett always says, be fearful when others are greedy, and greedy when others are fearful.
Photo by Samuel Boivin/NurPhoto via Getty Images
Valuation quietly becomes bull case
Here’s where things get interesting. Meta recently traded at roughly 15x its projected 2027 earnings of about $36 per share.
That’s one standard deviation below its 10-year average. A level reached only a handful of times in the past decade. A 55% discount relative to mega-cap tech peers.
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Actually, that kind of valuation compression doesn’t happen often. And historically, it has signaled opportunity.
Even after trimming his price target from $825 to $775, Nowak still sees around 45% upside from current levels near $536.
AI spending isn’t the problem
AI spending could actually be the catalyst. Investors have been skeptical about Meta’s AI strategy. Spending tens of billions before clear returns. As per Yahoo Finance, tech giants like Microsoft, Amazon, Alphabet, and Meta planned to spend about $635 billion in 2026 on AI infrastructure.
Looking at Meta, they now plan to spend $10 billion on its AI data center in El Paso, Texas, up from a prior commitment of $1.5 billion.
“Since breaking ground last year, we have been proud to call El Paso home and are committed to being a good neighbor.” The company said in a statement on March 26, 2026.
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But Morgan Stanley flips that narrative.
The firm believes Meta is laying the groundwork for a new ecosystem. One centered around what it calls “MetaClaw.” This potential AI system could combine Meta AI, the Manus agent, and the Moltbook platform
And what’s the goal? To create a personal AI assistant that can curate content, handle end-to-end shopping, and interact across Messenger, Instagram, and WhatsApp.
All without leaving Meta’s ecosystem. With over 250 million businesses on its platforms, Meta already has the infrastructure to monetize this at scale.
If it works, it will be a new revenue engine and not just an upgrade.
Meta still has strong fundamentals
Lost in the noise is one key fact: Meta’s core business is still performing.
In its Q4 2025 report on Jan. 28, 2026, the company delivered:
- Revenue: $59.89 billion, up 24% year over year, beating the estimated $58.4 billion
- EPS: $8.88, beating expectations of $8.19
- Net income: $22.77 billion, 9% increase year-over-year.
- Operating margin: 41%
Looking at its family apps (Facebook, Instagram, WhatsApp), revenue was $58.94 billion. A 25% increase YoY. Daily active users also surged, reaching 3.58 billion, a 7% increase year-over-year.
Ad revenue remains dominant, accounting for nearly all of total sales. And engagement is still growing, with 3.58 billion daily active users across its platforms. That’s not a struggling business. It’s a highly profitable one investing aggressively in its next phase.
Cost cuts could also add a bullish layer
There’s another lever investors are watching. Efficiency. As per CNBC, Meta could cut up to 20% of its workforce, potentially saving $3 billion to $10 billion annually.
According to Morgan Stanley, that alone could add over $1 to 2027 earnings per share. That’s not insignificant. It also creates a cushion if ad markets weaken.
The chart also says this level matters
Technically, looking at the weekly chart, Meta is at a Point of Interest (POI). Meta recently traded at roughly 34% below its all-time high of $796, reached in August 2025. Since then, it has mostly been in a correction mode.
Right now, it’s sitting in a key zone. A support zone ranging from around $525 to $550. A long-term ascending trendline in place since 2024 also offers another confluence.
Meta Weekly Chart Via Trading View
So what happens next? A rejection at the current level could trigger a move higher. A breakdown could also send the stock toward the $480 support level. So, merging it with Morgan Stanley’s buy call, I would be waiting for just one thing before going long. A bullish confirmation at the current level.
Looking forward, Meta’s next earnings report is expected on April 29, 2026. That will also offer a picture of what the stock may perform going forward.
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