NEW YORK, July 12 — Morgan Stanley analysts have raised their price target for Meta shares to $650, following a 15% weekly gain in the stock. The move came on March 20, 2025, with Goldman Sachs following a day later by setting a target of $675. Both firms pointed to AI-driven advertising improvements and new revenue from AI products as the key drivers.
What the numbers tell us
Meta’s stock has had a notable run. It traded at a 52-week low of $414.50 in April 2024, then climbed to a high of $592.00 in February 2025. As of March 21, 2025, the company’s price-to-earnings ratio stood at 28.5. For context, the S&P 500 average P/E ratio was 22.3 at the same time. That premium reflects investor expectations that Meta’s AI investments will continue to pay off.
The company reported earnings per share of $20.50 for 2024, up sharply from $14.87 in 2023. Analysts project EPS will reach $26.00 for 2025, with AI efficiencies playing a central role in that growth.
The cash engine behind the AI push
Meta generated $43.2 billion in free cash flow for 2024. That’s the kind of number that lets a company throw serious weight behind its AI ambitions without having to borrow or cut corners elsewhere. Think of it like having a well-funded R&D lab that can chase big ideas without worrying about the monthly budget — except the lab is one of the biggest tech companies on the planet.
In February 2025, Meta also announced a $50 billion share buyback program. That signals confidence from management that the stock is undervalued, and it returns cash to shareholders directly.
The practical upshot for ordinary investors
So what does all this mean for someone watching their portfolio? The analyst upgrades suggest Wall Street sees Meta as better positioned than its peers to monetize AI. The advertising business — already Meta’s cash cow — is getting a boost from AI tools that help target ads more effectively and measure their performance. New AI products are also starting to generate their own revenue streams.
The key question is whether Meta can sustain this momentum. The projected EPS growth from $20.50 to $26.00 in a single year is aggressive, and it relies heavily on AI delivering real, measurable results. If the AI advertising improvements continue to drive revenue, and if the new AI products gain traction, the stock could justify those higher price targets. If not, the premium valuation could come under pressure.
For now, the analysts at Morgan Stanley and Goldman Sachs are betting on the AI story. The next earnings report will give investors a clearer picture of whether that bet is paying off.
Sources
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