Meta Platforms (NASDAQ:META) is significantly advancing its artificial intelligence capabilities, with CEO Mark Zuckerberg announcing ambitious plans for several multi-gigawatt data centers.
These include the 1-gigawatt (GW) Prometheus supercluster, projected to be operational by 2026, and the even larger Hyperion, aiming for at least 5GW of compute capacity by 2030.
Such substantial investments highlight Meta’s strong conviction in its future revenue growth, anticipated to be largely propelled by innovations in AI-powered advertising.
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While these ambitious projects necessitate considerable capital and operating expenditures, they are also strategically designed to attract leading AI talent and solidify Meta’s position as a frontrunner in AI innovation.
Bank of America Securities analyst Justin Post maintained a Buy rating on Meta Platforms and increased the price forecast from $765 to $775 on Tuesday.
Post specifically cited Zuckerberg’s Threads post detailing the multi-gigawatt data center builds as a clear indication of Meta’s confidence in its revenue trajectory.
The analyst acknowledges that the sheer scale of this investment implies higher future capital and operating expenditures. Furthermore, Post noted that Zuckerberg’s announcement serves as a recruitment signal, positioning Meta as a premier destination for AI talent and innovation.
AI investment is expected to be a primary focus during Meta’s upcoming earnings call, where the company will likely need to demonstrate strong returns on its AI initiatives to drive further multiple expansion.
Recent advertising checks suggest an improvement in ad spending since April, leading Post to increase his revenue estimates.
This revision reflects improved macroeconomic conditions, favorable foreign exchange rates, and advancements in Meta’s AI ad stack.
However, he slightly lowered his above-Street 2026 estimated earnings per share (EPS), factoring in higher AI-related research and development expenses.
Post’s revised estimates incorporate a $6 billion increase in 2026 estimated capital expenditure and a rise in depreciation and amortization due to the extensive AI infrastructure.
For 2025, the analyst raised Meta’s revenue estimate by 1% to $190 billion and EPS to $26.83, up from $26.78. For 2026, he increased the revenue estimate by 1% to $217 billion, surpassing the Street’s $213 billion consensus, but concurrently lowered the EPS by 1% to $29.16, compared to the Street’s $28.40.
The increase in Post’s price forecast is directly linked to the anticipated higher growth stemming from AI-driven advertising improvements.
Meta remains Post’s top online advertising stock for 2025, deemed best positioned to capitalize on AI-driven advertising market share gains and upside.
The analyst believes Meta’s AI investments will drive product-driven advertising upside through advancements in spend automation, personalized targeting, and messaging services, which could further fuel investor optimism and support a higher valuation multiple.
Post projects third-quarter revenues of $47 billion, exceeding the Street’s consensus of $46 billion.
Price Action: META stock is trading lower by 0.33% to $718.79 at last check Tuesday.
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