Wells Fargo analyst Ken Gawrelski lowered the firm’s price target on Meta Platforms (NASDAQ:META | META Price Prediction) to $765 from $770, while keeping an Overweight rating on the shares. The $5 trim is a modest calibration that leaves the broader thesis intact on one of the most closely watched AI infrastructure names on Wall Street.
Wells Fargo continues to back Meta Platforms (NASDAQ:META) as a beneficiary of improving market confidence in companies monetizing compute investments directly through cloud business, even though Meta Platforms doesn’t sell cloud services to outside customers. The firm maintains its Overweight rating despite the modest target reduction.
| Ticker | Company | Firm | Action | Old Rating | New Rating | Old Target | New Target |
|---|---|---|---|---|---|---|---|
| META | Meta Platforms | Wells Fargo | Price Target Cut | Overweight | Overweight | $770 | $765 |
The Analyst’s Case
Gawrelski’s framework leans on accelerating cloud revenues, stable-to-improving margins, and rapidly rising backlogs across the AI compute ecosystem. Meta Platforms isn’t a cloud-as-a-service vendor like its hyperscaler peers.
Yet, Meta Platforms is one of the largest spenders on AI compute globally. Q1 FY2026 raised full-year capex guidance to $125 to $145 billion, up from the prior range, citing component pricing and data center costs.
Ad metrics support the thesis. Meta Platforms’ ad impressions rose 19% year over year and average price per ad climbed 12%, while family daily active people reached 3.56 billion.
Company Snapshot
Meta Platforms operates the Family of Apps segment, including Facebook, Instagram, Messenger, WhatsApp, and Threads, alongside the Reality Labs hardware unit. The company carries a market cap of $1.53 trillion and trades at a P/E ratio of 22x.
Q1 FY2026 delivered revenue of $56.31 billion for Meta Platforms, up 33% year over year, and EPS of $10.44. Reality Labs posted an operating loss of $4.03 billion, an ongoing drag on consolidated profits.
Why the Move Matters Now
Meta Platforms stock has been under pressure since the capex raise, which unsettled investors despite the earnings beat. Shares closed at $602.61 on May 19, down 12% over the past month.
The wider Street is more bullish than Wells Fargo. The consensus analyst price target sits at $826.69, with 47 Buy and 9 Strong Buy ratings versus 7 Holds and zero Sells. The Wells Fargo $765 target is conservative relative to peers, yet firmly constructive.
Meta Platforms CEO Mark Zuckerberg framed the spending as foundational, declaring:
“We are increasing our infrastructure CapEx forecast for this year. Most of that is due to higher component costs, particularly memory pricing. But every sign that we are seeing in our own work and across the industry gives us confidence in this investment.”
What It Means for Your Portfolio
This META price target cut preserves the Overweight rating, signaling continued conviction in the thesis. The trim keeps the Overweight rating intact and positions Meta Platforms stock as a core AI infrastructure holding.
The bear case is real. Reality Labs continues to burn cash, EU and U.S. regulatory pressure is intensifying, and Meta Platforms lacks the explicit cloud-as-a-service revenue line anchoring the bullish hyperscaler thesis.
The bull case rests on Meta Platforms converting massive compute outlays into measurable ad ROI, Reels engagement, Llama platform value, and emerging agentic AI surfaces. Position sizing should reflect both the long-term opportunity and near-term volatility tied to capex digestion.
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