Meta Platforms Inc. (NASDAQ:META) shares are gaining Friday. Citizens and Piper Sandler both weighed in on the stock. Here’s what you need to know.
- Meta Platforms shares are climbing with conviction. What’s behind META gains?
Citizens: A New Revenue Stream Takes Shape
Citizens analyst Andrew Boone kept his Market Outperform rating but trimmed his price target to $800 from $825, citing an expected step-up in capital spending. The cut to his target reflects a one-turn reduction in his valuation multiple on 2027 earnings estimates, down to 24 times from 25 times, as the firm now sees Meta spending roughly $200 billion on infrastructure in 2027, up from an earlier estimate of around $135 billion. That level of spending, Boone estimates, would leave Meta with a free cash flow deficit of approximately $44 billion in 2027, making a capital raise an increasingly plausible scenario.
The trigger for the note was Meta’s launch of Muse Spark 1.1, a proprietary AI model the firm views as a meaningful step toward competing with frontier AI labs. The model posted top scores on five of 11 benchmarks the firm tracks and is priced at $1.25 per million input tokens and $4.25 per million output tokens, a level the firm calculates is four to seven times cheaper than comparable offerings from OpenAI and Anthropic. Boone views the aggressive pricing as a deliberate effort to pull developers onto Meta’s platform, and sees the simultaneous launch of the Meta Model API, now in public preview, as a strategically important move that lets the company begin selling access to intelligence rather than just using AI to power its own products.
The firm also sees API revenue as a potential billion-dollar business for Meta on its own. Using Anthropic’s roughly $47 billion annualized revenue run rate as a benchmark, Boone estimates that even a 5% share of a comparable API opportunity would translate to around $2 billion in annualized revenue for Meta.
Piper Sandler: Still the Top Large-Cap Pick
Piper Sandler analyst Thomas Champion separately reiterated an Overweight rating and held his price target at $800, keeping Meta as his top large-cap pick. Champion cited the combination of durable revenue growth and what he views as an attractive valuation as the foundation of his conviction.
His note flags second-quarter revenue of approximately $61 billion and a third-quarter outlook of $61 billion to $64 billion as the key financial markers to watch heading into earnings, alongside updates on Meta’s capital spending trajectory for 2026 and 2027, the rollout of its Business Agents product on WhatsApp and the expected debut of a new cloud infrastructure business.
META Shares Are Flying
META Price Action: Meta shares were up 5.92% at $668.86 at the time of publication on Friday, according to Benzinga Pr.
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