Wells Fargo Lowers Meta Price Target to $640
Wells Fargo analyst Ken Gawrelski lowered the price target on Meta Platforms Inc.
(NASDAQ: META) to $640 (from $835) while maintaining an Overweight rating.
“Estimate internal token costs contributed roughly $2B y/y cost growth, accounting for about 40% of y/y non-GAAP R&D spending that came in above our expectations.
Beyond employee costs lapping the AI talent acquisitions of ’25 and infrastructure costs, internal token spending was listed as the 4th largest driver of OpEx growth, the first such mention in prepared cost remarks.
Token spend another factor to consider for ’27 OpEx, where we see capacity-related OpEx contributing 25pts to growth. Estimates, rating and price target.
Reduce ’27 & ’28 total revenues by 3% each, reflecting lower revenue contribution from 3p capacity resales. ’26 total revenue forecasts increased 1%.
Cut ’27 / ’28 OI estimates by 11% / 12%, given lower revenue estimates and higher OpEx forecasts, driven by R&D (token costs & model training).
Reduce ’27 / ’28 EPS estimates by 14% / 13% to $32.07 / $38.73.
Maintain Overweight rating and cut PT to $640 (prior $835) based on 20x (prior 22.5x) our ’27 EPS.”
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