JPMorgan Downgrades Meta to Neutral, Cuts Price Target to $725
JPMorgan analyst Doug Anmuth downgraded Meta (NASDAQ: META) from Overweight to Neutral with a price target of $725.00 (from $825.00).
“We’re downgrading Meta shares from Overweight to Neutral and reducing our PT from $825 to $725.
While we’re encouraged by META’s +33% Y/Y revenue growth which has been supported by AI-driven ad stack optimizations, accelerating impression growth, & engagement gains, we believe full-stack AI competition is intensifying and Meta has a more challenging path to returns on heavy AI capex beyond advertising.
Most notably, Google and Amazon are seeing strong Cloud revenue acceleration w/Google Cloud backlog almost doubling Q/Q & AWS backlog increasing+50% Q/Q.
We believe both provide line of sight toward multi-year ROIC across AI capex as GOOGL & AMZN benefit from deep enterprise tech stack integrations, silicon supply, & model diversity.
META raised the 2026 capex guide $10B to $125B-$145B & we now project capex growth of +42% to $202B in 2027, resulting in negative FCF of -$4B in 2026 & -$24B in 2027.
More near-term, META will continue to optimize AI-driven ad ranking/ recommendation & tech gains, grow engagement, and deliver strong revenue growth.
However, revenue growth will likely decelerate through 2026 driven by tougher Y/Y comps, Middle East conflict headwinds, Europe LPA implementation, & FX.
For now, we’re moving to Neutral-rated & believe shares could remain pressured as investors look for greater clarity on agentic products and how Muse models will help drive incremental revenue beyond advertising.
Our $725 PT is based on 21x 2027E GAAP EPS of $34.01.”
The price target and rating on this page are the opinion of the issuing research firm and its analyst, not of Price Target. This page is published for informational purposes only and is not investment advice, a recommendation, or an offer to buy or sell any security. Past performance does not guarantee future results. Consider your own circumstances and consult a licensed financial adviser before making investment decisions.
This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.
