Meta’s $145 Billion Spending Scare Just Opened a Window for Investors. Here’s How High the Stock Could Go.

Meta Platforms (META) has been spending a hefty $130 billion to $145 billion this year, primarily on AI development and data centers, leading to a collapse in free cash flow and causing investor concerns. However, BNP Paribas has maintained an Outperform rating on META stock, with a higher price target of $855, signaling potential for growth.

Management believes selling AI models, agents, and finished products will be more profitable than renting out compute power, which is seen as a backup plan. The company's core ad business continues to grow rapidly, and investors see an opportunity in the discounted price of a strong company. Meta's forward P/E ratio of 19 times sits below its five-year average of 22 times, and the price-to-sales (P/S) ratio of 6.9 times is almost in-line with its five-year average.

Analysts expect a modest drop of 4% in fiscal 2026 earnings, followed by 21% growth to $34.47 per share in fiscal 2027. If Meta's AI spending generates clear returns, its earnings multiple could expand, potentially pushing shares to the $700 to $750 level.