Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) shares rose nearly 10% to about $735 following its latest earnings report, as Bank of America analysts highlighted accelerating advertising growth and early evidence that artificial intelligence investments are contributing to the company’s core business.
Meta reported fourth-quarter revenue of $59.9 billion and earnings of $8.88 per share, both above consensus estimates, and guided first-quarter revenue of $53.5 billion to $56.5 billion, exceeding Wall Street expectations.
Following the report, the bank’s analysts reiterated their ‘Buy’ rating on Meta and raised its price objective to $885.
The firm described the results as “a big step forward in AI proof points with ad growth acceleration surprise,” and said the quarter provided “results, a proof point for AI benefits for the core ad business, and multiple catalysts ahead.”
Bank of America added that Meta indicated multiple AI models are improving usage and advertising efficiency, contributing to accelerating growth.
The analysts also pointed to Meta’s elevated spending outlook, with fiscal 2026 expense guidance of $162 billion to $169 billion and capital expenditures of $115 billion to $135 billion, both above consensus estimates. However, they noted that “although expense guide was well above estimates, revenue upside will offset (helping with overhang), and Meta appears expanding its sector leadership and building bigger AI moats.”
Bank of America said Meta’s guidance for profit growth in 2026 implies a strong revenue outlook for the full year and suggests that higher spending is tied to revenue growth and could be moderated if conditions change.
The bank raised its 2026 revenue forecast by 6% and increased earnings estimates for 2026 and 2027, citing stronger fundamentals and continued momentum in Meta’s advertising business.
“We still see potential for sub-10% EPS growth in 2027 given the current expense curve, but Meta’s guide suggests spending will be regulated based on revenues,” they wrote.
Looking ahead, the analysts pointed to several potential catalysts, noting that AI investments are generating returns, particularly for Meta, and noting that new models and products are in development as the company looks to diversify beyond advertising over the long term.