Bank of America Maintains Buy on Meta, $835 Price Objective

BofA Securities analyst Justin Post maintained a Buy rating and $835.00 price objective on Meta (NASDAQ: META).

“Meta rolls out new AI search feature, AI Mode.

Today, Meta rolled out a new AI-powered search feature on Facebook, AI Mode, that helps users find answers based on public posts across Meta’s apps such as Groups and Reels.

Meta highlighted that AI Mode uses Meta AI (MuseSpark LLM) to give answers grounded in what people are saying publicly across apps such as Groups and Reels, so users get real perspectives and experiences that are differentiated vs standard AI search results.

Meta also introduced AI creative tools including photo and video editing features, including collage templates and tools that automatically create smooth, stylized video montages from recent camera-roll clips.

The company also added AI-driven photo presets, allowing users to change clothing, hair and accessories.

Our Take: An interesting initiative to utilize real-time public content to drive search results, with an opportunity to provide differentiated responses.

We see best commercial opportunities around product, service or experience recommendations.

For the core advertising business, incremental search activity could also help generate new intent signals that would help improve ad relevance and targeting.”

“AI could be the opening for Meta search. AI technology has opened the door for better “indexing” of content for search results, possibly creating an opportunity for Meta.

Near-term, we expect the company to focus on refining the product and driving adoption, with monetization potential in future years.

The “search” opportunity remains large for Meta, if the company can drive product adoption.

Assuming an avg. one incremental query per user per day for AI Mode across Meta’s ~3.5bn daily active user base, the product could generate ~1.3tr annual queries.

If ~20% of these queries are commercial and generate 20% ad CTR, this would equate to ~50bn ad clicks.

Applying a ~$0.30 CPC would equate to an incremental $15bn revenue opportunity (~5% Street’s 2027 revenue estimates).

Also, as agentic use cases gain traction over time, AI Mode could become an entry point into Meta’s agentic ecosystem, enabling the company to capture more of the consumer journey from intent formation to transaction within its closed ecosystem.

Overall, we remain positive on Meta’s AI product cycle and over coming months expect launch of more such new AI-native features/tools built on top of MuseSpark LLM that could either drive higher engagement or create incremental monetization opportunities.

Maintain Buy. Next catalysts: Launch of consumer agentic products, more advanced LLMs, Connect conference (Sep’26), and more details on enterprise AI opportunity.”

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.