Guggenheim Lowers Meta Price Target to $800
Guggenheim analyst Michael Morris lowered the price target on Meta (NASDAQ: META) to $800.00 (from $850.00) while maintaining a Buy rating.
“Meta delivered strong 1Q results with total revenue of $56.3bn (+29% y/y ex-FX) underpinned by accelerating advertising growth and continued engagement gains across the family of apps.
Daily active people reached 3.56bn, with Instagram and Facebook seeing all-time high engagement driven by video content, though we note a sequential decline attributed to internet disruptions in Iran and WhatsApp access restrictions in Russia.
Ad impressions grew 19% while average price per ad increased 12%, reflecting both ad performance gains and improved macro conditions, with impression growth driven by engagement rather than ad load.
2Q revenue guide of $58-61bn (+22-29% y/y) demonstrates continued growth durability, though European DMA consent changes will create a modestly larger headwind in 2Q.
Updated 2026 capex guidance of $125-145bn (from $115-135bn) largely reflects higher component pricing, particularly memory, and management is balancing willingness to spend on compelling growth opportunities with operating efficiency evidenced by the 10% headcount reduction announced last week.
As an early proof point of investment return, Muse Spark, the first model from Meta Super Intelligence Labs, powers Meta AI and represents early evidence of model-driven engagement gains across the platform.
We believe core advertising growth remains compelling and management has earned investor confidence in the capital spend strategy; however, unlike Alphabet, where capex returns are measurable via incremental cloud revenue, the payoff from Meta’s AI spend remains largely embedded in the existing ad P&L rather than producing a standalone revenue stream.
Strong top line growth supports our BUY rating, but higher expense outlook drives trims to 2027 earnings and cash flow estimates. Maintain BUY; PT to $800 (from $850).”
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