Meta’s Biggest Bull Sees 30% Growth This Year
Evercore's top analyst just named Meta his number one pick with a bold price target, but his own timeline for free cash flow recovery quietly signals how much has to go right before the bull case actually pays off.
Evercore ISI’s Mark Mahaney went on CNBC Tuesday morning and planted a flag on Meta Platforms (NASDAQ:META | META Price Prediction), calling the company’s new Muse AI assistant “the best product coming to market” and making Meta his number one pick with an $860 price target. The call landed the morning after one of Meta’s strongest sessions in over a year, with the stock trading around $739.99 intraday and up 34.66% over the past month.
Mahaney’s math is simple. He wants investors to pay 25 times earnings for “an asset that can grow 30%,” drawing a comparable to Google’s re-rating from 15 to 30 times earnings inside 12 months. On the current 2026 consensus EPS of $31.43, that stretch to $860 requires the market to accept a growth-stock multiple on a business that just posted a very different quarter.
Where the Bull Case Meets the Reported Numbers
Meta’s Q2 2026 report, filed July 29, 2026, showed revenue of $60.80 billion, up 27.96% year over year, but net income of $15.85 billion, down 13.57%. EPS came in at $6.18, missing the $7.22 consensus by 14.42% and ending a six-quarter beat streak. Operating margin compressed to 31% from 43% a year earlier, weighed down by $2.40 billion in legal charges and $1.18 billion in severance tied to an 8,000-person headcount cut. Shares dropped roughly 10% the day after the earnings report, from $597 to $527 within an hour of the filing. The 8-K exhibit lays out the full damage.
Mahaney’s 30% figure lines up cleanly with the revenue trajectory rather than earnings. Q1 2026 revenue grew 33.1% and Q2 grew 28%, with ad impressions up 14% and average price per ad up 12%. Family of Apps daily active people hit 3.60 billion. That is the top line story feeding the bull case.
Free Cash Flow Problem Mahaney Named Himself
The tension in Mahaney’s own thesis is the timeline. He told CNBC that free cash flow “is probably going to turn up in 2028”. Meta’s Q2 free cash flow collapsed to $784 million, down 91.31% year over year, as capex ran $30.12 billion in the quarter, up 82.1%. Full-year 2026 capex guidance was narrowed higher to $130 billion to $145 billion, and full-year expenses were raised to $165 billion to $169 billion. Capex covers Meta’s entire AI infrastructure buildout, including the one gigawatt data center in El Paso, Texas being developed with BlackRock. All of that concrete and silicon has to be powered and cooled by someone, and we profiled seven of the suppliers riding that wave in a free report on the AI infrastructure buildout. Muse is only one product riding on top of that stack.
Muse and the Monetization Menu
The product case is real. Since Meta rebuilt its assistant and integrated Muse Spark, the company reported a 60% increase in daily interactions. Business agents are already active with more than 1 million businesses on WhatsApp and Messenger weekly. Mahaney’s monetization framing hits every lever: “Can they put advertising on this? Yes. Subscriptions. Yes. Transaction revenue shares. Yes.” He notes that with 3.6 billion users, “all you need is 1% to sign up for a subscription” to generate roughly $8 billion in revenue.
Reading the Outlier
The Street average price target sits at roughly $755, making Mahaney’s $860 an outlier well above consensus. Analyst behavior tells its own story: 2026 EPS consensus has seen 45 downward revisions versus 4 upward in the trailing 30 days. Meta is still down 4.56% over the past year even after this month’s rip. The bull needs Muse to scale before the capex cycle finishes chewing through operating income, which is why 2028 keeps showing up as the punchline. Meta’s investor relations site and the September 23rd Connect event are the next checkpoints to see whether the product velocity Mahaney is buying actually lands.
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Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
