An Analyst Just Named Mark Zuckerberg's Meta a Top Large-Cap Long Idea, Citing AI-Driven Ad Momentum and an Attractive Valuation

Evercore analyst Mark Mahaney elevated Meta to a top large-cap long idea, highlighting AI-driven advertising momentum and a forward price-to-earnings ratio of 17x. Wall Street maintains a bullish stance with a median price target of $800.

The upgrade comes as META shares tumbled 10% following an earnings report that missed investor expectations. The company posted 28% revenue growth but earnings per share declined 13% year-over-year. Management issued capital expenditure guidance of $130-145 billion, reflecting massive AI infrastructure investment that raised concerns about near-term profitability.

The selloff underscores tension between Meta's strong top-line growth and escalating AI spending. The company also signaled delays in AI model rollouts, adding uncertainty to the timeline for returns on its aggressive capex plan. Mahaney's call positions Meta as attractively valued despite these headwinds, betting that AI-powered advertising improvements will justify current spending levels.

The disconnect between the 10% drawdown and the $800 Street target suggests a roughly 60% upside from post-earnings levels, assuming the stock traded near $500 after the drop.