Goldman Sachs Maintains Buy on Meta, $860 Price Target

Goldman Sachs analyst Eric Sheridan reiterated a Buy rating and $860 price target on Meta Platforms Inc. (NASDAQ: META).

“We expect investors to have an initial positive reaction to META’s Q3 ’26 earnings report on the back of a revenue beat with the result exceeding the high end of its guided range (with reported Advertising revenues +26% YoY).

The profitability in the reported was impact by a ~$9.9bn one-time accrual related to the agreement between the company and a group of US State Attorneys General to resolve litigation related to teen mental health and social media – absent this charge, profitability exceeded GSe/Visible Alpha Street estimates.

Among the topics in the release, we expect investor attention to be focused on (a) the advertising revenue run rate (both as an absolute $ amount and growth rate) as Meta management continues to outline how the application of AI compute to its core operations is acting as a sustained tailwind to the core business; (b) the reduced headcount reported in the quarter (full-time employees down ~12% QoQ / ~15% YoY); & (c) the framing of a YoY reduction in Reality Labs losses in 2026 and initial guidance for further reduction in losses in 2027.

Looking beyond this year, Meta mgmt expressed positive qualitative framing of the scaling of their AI efforts (including the ability to impact core operations) but framed continued elevated investments going forward (without a direct quantification).

On the earnings call, we think how the mgmt team addresses the early reads and operating momentum from Muse, the scope of the market opportunity across AI applied to SMBs and large enterprises & how to think about sustained/continued strength in the core advertising revenue is likely to be the key area of focus.

In addition, we expect further questions to try to frame and triangulate the qualitative comments about 2027 investment levels.

Lastly, the creation of a new class of non-voting stock and what it might mean for capital raising activities could also be a focal area.”

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