Deutsche Bank Reiterates Buy Rating on Meta, $920 Price Target
Deutsche Bank analyst Benjamin Black reiterated a Buy rating and $920.00 price target on Meta (NASDAQ: META).
“It is becoming increasingly clear that Meta’s investments in AI are yielding ever increasing returns for advertisers, which in turn is supporting not only top-line durability, but also advertising revenue growth acceleration.
We recently hosted an ad-check call (link) with Andrew McLean, Principal and Managing Director of Inventus Media.
At his agency, ad spend growth on Meta came in at +6.0% in 1Q26, exceeding the +5.5% expectation set at the quarter-ago call, driven by strong ROI from its Advantage+ product suite.
Given the strong performance on the platform, for 2Q26, he expects overall spend to accelerate almost 40bps (to +6.4% y/y), which is in contrast to consensus expectations that call for ~230bps of sequential deceleration in FXN y/y growth in 2Q26 on a ~210bps tougher comp.
Our conversations suggest that investors are expecting 1Q26 revenue of $57bn, with the high-end of the 2Q26 guide approaching $60.5-$61.0bn (up 27-28% y/y).
In regards to expenses, we believe 2025’s upward bias to expenses was an aberration as the company absorbed the incremental costs of the Meta Superintelligence Labs team (as well as the team’s growing demands for cloud compute).
In 2026, we suspect the company is adopting an approach to guidance more akin to prior years, where the bias to the expense guide was to trend flat to down throughout the year.
In fact, over the last 4 years, Meta has lowered its expense outlook three times in the 1Q, including at 1Q25 earnings.
We have also heard concerns that the expanded CoreWeave deal could potentially signal higher trending opex/capex, that said, we note that the MSA from the prior agreement in Sept 2025 had included language that Meta had “the option to materially expand its commitment through 2032 for additional cloud computing capacity.” As such, we believe this incremental spend was already contemplated in Meta’s opex and capex outlook.
Meta also recently released Muse Spark, the first foundation model coming from the revamped Meta Superintelligence Lab (MSL), which we think is geared towards supporting Meta’s core business, and the Meta AI assistant.
It has been engineered from the ground up as a “natively multimodal reasoning engine,” designed to seamlessly integrate visual data with text and tools.
This differs from some existing models that have had multimodal capabilities added on.
A key innovation is its “Contemplating Mode,” which utilizes a multi-agent system to tackle complex problems in parallel, aiming for deeper analysis without significant latency.
And even as importantly, per Meta, Muse Spark has been architected for efficiency, in that versus the Llama 4 Maverick model, it uses “an order of magnitude” less compute resources, which is critical in an environment with severe chip shortage and for deployment in smaller form factors.
Based on reports from independent benchmarks, we believe this new model may not have entirely leapfrogged the top tier, but it is still highly competitive, particularly in visual analysis, reasoning, and healthcare applications.”
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