KeyBanc and Cantor raise Meta price targets on AI momentum

KeyBanc raised its price target for Meta Platforms to $900 from $780, while Cantor Fitzgerald lifted its target to $860 from $680, with both firms maintaining Overweight ratings. The revisions cite momentum around Meta's Muse AI assistant and the emergence of multiple revenue growth paths.

Analyst Justin Patterson at KeyBanc argues that Muse's performance suggests consumer AI sentiment is poised to improve. He notes that Meta now has "multiple paths to drive revenue growth," expecting product innovation to accelerate medium-term revenue and earnings, which supports further multiple expansion. Cantor Fitzgerald frames personal agents as a potential "third S-curve" in the AI sector, positioning Meta as a leading beneficiary. The firm describes Muse as a "competitive model" trained for agentic tasks and sees several paths to a profitable freemium model, despite current unit economics being subsidized.

Meta's financials show significant scale alongside heavy investment. Q2 FY2026 revenue reached $60.80 billion, up 27.96% year over year, with advertising revenue totaling $59.36 billion. Diluted EPS came in at $6.18, missing the $7.22 consensus due to $2.40 billion in legal charges and $1.18 billion in severance costs. Capital expenditure hit $31.1 billion in the quarter, with management guiding FY2026 capex to between $130 billion and $145 billion to fund AI infrastructure.

The stock has reacted strongly to these developments, rising 37.6% over the past month and 12.9% in the last week to trade near $756.15. Meta carries a market capitalization near $1.67 trillion and trades at a price-to-earnings ratio of approximately 27. Consensus estimates project EPS of $31.43 for 2026 and $33.94 for 2027, with revenue estimates of roughly $254 billion and $306 billion, respectively.

CEO Mark Zuckerberg stated on the earnings call that on a dollar basis, Meta's ads business is reporting faster year-over-year revenue growth than any other company's reported ad business. The company's operating margin has compressed to 31% from 43% a year earlier as it navigates the heavy capex cycle. For investors, the case for the stock hinges on whether AI monetization, including ad ranking gains and business agents on WhatsApp, can outpace these infrastructure costs.