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Why Wells Fargo Raised Its Meta Target to $1,000 Despite a 2027 Earnings Warning
Wells Fargo raised its Meta target to $1,000 and kept its Overweight rating because it sees long term potential in Muse.
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- Wells Fargo raised its Meta target to $1,000 and kept its Overweight rating because it sees long term potential in Muse.
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openai.comCreate a landscape editorial hero image for this Studio Global article: Why did Wells Fargo analyst Ken Gawrelski raise Meta Platforms’ price target on Tuesday from $796 to $1,000—matching the highest analyst tar. Article summary: Wells Fargo’s $1,000 target and Overweight rating reflect confidence in Meta’s longer-term AI opportunity, not an expectation that Muse will contribute substantial revenue next year. Ken Gawrelski considers enthusiasm fo. Topic tags: general, general web, user generated, news. Style: premium digital editorial illustration, source-backed research mood, clean composition, high detail, modern web publication hero. Use reference image context only for broad subject, composition, and topical grounding; do not copy the exact image. Avoid: logos, brand marks, copyrighted characters, real person likenesses, fake screenshots, UI text, readable text, watermarks, charts w
Wells Fargo’s $1,000 price target reflects confidence in Meta’s longer-term AI opportunity, not an expectation that Muse will quickly lift profits. Analyst Ken Gawrelski called enthusiasm for the product cycle warranted, while warning that higher costs could weigh on 2027 earnings before Muse makes a meaningful contribution. 18
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Why the bullish target can coexist with a cautious 2027 forecast
A price target looks beyond the next quarter. Wells Fargo’s thesis is that Muse could become part of Meta’s future growth story, even if the near-term path involves higher investment and weaker earnings estimates. The firm kept its Overweight rating as it raised the target from $796 to $1,000, but expected the third-quarter call to temper expectations for Muse revenue in 2027. 18
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The firm projects Meta’s 2027 operating expenses at $210 billion–$215 billion, compared with roughly $202 billion in consensus estimates. It sees 2027 earnings per share of about $31–$32 as plausible, versus roughly $34 consensus. Wells Fargo also lowered its 2027 revenue estimate by 1.5% to $309 billion and its EPS estimate by 2.1% to $31.18. These are analyst forecasts, not Meta guidance. 18
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The outlook improves further out: Wells Fargo raised its 2028 EPS estimate by 3.3% to $40.02, based on projected operating expenses of $256 billion. That forecast suggests the firm expects a tougher earnings period before a potential later recovery—not that the spending risk has disappeared. 18
What Wells Fargo expects from the quarter and guidance
Gawrelski expected third-quarter revenue of about $64 billion, up 25% year over year and at the high end of Meta’s $61 billion–$64 billion guidance. He also anticipated a $10 billion litigation-settlement charge. 19
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For the earnings call, he expected Meta to raise its 2026 expense outlook to $175 billion–$177 billion from $165 billion–$169 billion, and to guide for fourth-quarter revenue of $72.5 billion–$75.5 billion. The top of that projected range would be about 3% above consensus. Those figures describe the analyst’s expectations for Meta’s update, not guidance already issued by the company. 19
The advertising business is a source of support—and a key part of the cost equation
Wells Fargo cited faster growth in time spent on Instagram: the rate accelerated by nearly 500 basis points compared with the second quarter. That was partly offset by high-single-digit declines at Facebook. These engagement trends support the case for Meta’s existing business, but they do not establish when Muse will generate meaningful revenue. 25
Meta’s second-quarter results show why costs remain central to the debate. Revenue rose 28% year over year to $60.8 billion, while total costs and expenses increased 55% to $42.03 billion. The strong revenue growth and faster expense growth put the opportunity and the execution challenge side by side. 51
Muse’s early reach is not the same as monetization
Muse reportedly passed 3 million weekly users who sent at least one prompt, with more than 1 million people sending prompts daily. That early usage helps explain investor interest, but user activity alone does not show how much revenue the product will produce or when. 10
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The central question behind Wells Fargo’s call is therefore a timing question: how much will Meta spend to develop its AI products, and how quickly can adoption translate into earnings? The $1,000 target reflects the potential the firm sees over time; its 2027 forecast warns that investors may have to wait for the financial payoff.
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What is the short answer to "Why Wells Fargo Raised Its Meta Target to $1,000 Despite a 2027 Earnings Warning"?
Wells Fargo raised its Meta target to $1,000 and kept its Overweight rating because it sees long term potential in Muse.
Sources
finance.yahoo.comMeta Gets A $1000 Target From Wells Fargo
markets.businessinsider.comMeta Platforms price target raised to $1,000 from $796 at Wells Fargo
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