Facebook-parent Meta Platforms stands out as a future leader in monetizing artificial intelligence products despite recent drama involving its strategy, says UBS, which on Thursday hiked its price target on the company. Meta stock gained on Thursday, adding to a recent rally.
UBS analyst Stephen Ju hiked his price target for Meta stock to 812 from 683. He holds a buy rating on the social media giant.
"While we have noted the recent headlines around the Scale AI investment as well as stepped-up AI talent recruitment, we point out that the capital spending and likely most of the operating expenses (growth) at this point is reflected in our forecasts while none of the incremental long-term revenue from (AI initiatives) are reflected in our and street models," Ju said in a report.
He added: "As Meta is also not necessarily exposed to the danger of what may be slower-than-anticipated enterprise AI spend — it is after all the primary user of its own technology — we worry less about a potential capacity-demand digestion."
Big AI Acquisition
Meta in April released its open source Llama 4 AI model family, but performance reviews have been underwhelming.
Meta has agreed to invest $14.9 billion in Scale AI for a 49% stake in the startup. Scale AI provides data labeling services that help train and produce AI large language models. Scale AI Chief Executive Alexandr Wang will join a new AI research lab at Meta dedicated to pursuing "superintelligence."
On Meta's Q1 earnings call, CEO Mark Zuckerberg laid out five pillars of expected AI growth. They include improved advertising, engaging social media experiences, business messaging, the Meta AI app, and AI devices including spatial computing.
On the stock market today, Meta stock climbed more than 2% to 723.51. While still below a record high 740.91 from mid-February, Meta's shares are ahead 22% overall in 2025.
Meta Stock Technical Analysis
Meanwhile, Meta's Relative Strength Rating stands at 88 out of a best-possible 99.
Meta stock holds an Accumulation/Distribution Rating of B-plus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Also, Meta stock holds a Composite Rating of 97 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Meta stock has a 21-day ATR of 2.17%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
IBD suggests stocks with ATRs of up to 8% in the current market.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
