E-Paper
Meta stock jumps 7%: Why Wells Fargo sees more upside ahead of Meta Connect
Meta stock jumped 7% after Wells Fargo raised its price target to $796, citing Meta Muse, AI model growth and expectations ahead of Meta Connect.
Prefer HTon Google
Meta Platforms shares rose as much as 7.6% during Monday’s trading session. As of 11:22 a.m. ET, the stock was still up about 7.1%. The jump came after bullish comments from Wall Street about Meta’s latest artificial intelligence product, Meta Muse.
Wells Fargo analyst Ken Gawrelski raised his price target for Meta to $796 from $640. The firm also kept its Overweight rating on the stock. The new target suggests about 20% potential upside from Meta’s Friday closing price. Gawrelski made the move ahead of Meta Connect, Meta’s annual two-day event starting Wednesday, according to Motley Fool.
Meta Connect
Meta Connect is an important event for the company because it uses the event to show its latest developments in artificial intelligence. Investors will be watching for updates on Meta Muse, the company’s personal AI assistant.
Meta launched Muse earlier this month. Unlike a basic chatbot that mainly answers questions, Muse is designed to perform tasks for users. Meta offers a free version of Muse, while paid plans cost $20 and $100 per month, depending on usage.
One of the biggest questions at Meta Connect will be whether Meta gives an update on Muse's user numbers. Investors are also looking at whether strong usage can turn Muse into a regular source of revenue for Meta. Wells Fargo's view is partly based on early traction for the AI assistant and momentum from Meta’s newer AI models, according to 24/7 Wall St.
Also read: Why is Oura going public at $15.6 billion, and what does it mean for the US IPO market?
Meta Muse
Meta is focusing on AI products that can be used directly by consumers. This is different from several other technology companies that mainly sell AI tools to businesses through cloud services.
If users continue paying for Muse's higher-priced plans, Meta could build a new business around its AI products. Investors will therefore be looking beyond the initial launch and watching whether consumer demand continues over time.
Meta has seen a rise in people interacting with its AI assistant after Muse Spark was integrated. The company reported a 60% increase in daily users interacting with the assistant after the integration, according to 24/7 Wall St.
Meta AI
Wells Fargo's bullish view is not based only on Muse. The firm is also pointing to recent AI model releases and the product momentum around them.
Investors are expected to look for more information about Meta's newer models and how the company plans to expand its AI products. 24/7 Wall St. reported that Wells Fargo expects investor attention at Meta Connect to focus on Muse usage numbers and Meta's newer models.
Meta CEO Mark Zuckerberg has also highlighted the growing role of AI in the company's main businesses. During Meta's second-quarter earnings call, Zuckerberg said Meta's AI investments were accelerating major parts of its core business, according to 24/7 Wall St.
Also read: Why is Intel stock surging? AUO deal, AI chip plans and 18A progress explained
Meta Stock
Meta's stock is trading at less than 27 times earnings, according to Motley Fool. The company is still spending heavily on AI while growing its advertising business.
Wells Fargo's higher price target reflects the view that Meta's AI investments could create additional growth opportunities. The $796 target from Wells Fargo is higher than the reported Wall Street consensus target of $755.28.
This makes Meta Connect especially important for investors watching whether the company's AI products can support the higher valuation. The key focus will be on Muse adoption, new AI models and evidence that Meta can turn AI usage into revenue.
Why is Meta stock moving now?
Monday's rally is tied to a combination of Wells Fargo's higher price target, early Muse traction, Meta's AI model progress and expectations for Meta Connect. The company still faces higher costs and legal expenses, but its advertising business continues to grow.
The immediate focus now shifts to Wednesday's Meta Connect, where investors will look for evidence that Meta's large AI spending can translate into more users, new revenue and higher earnings.
