Wells Fargo Trims Meta Platforms Price Target to $765: Why the AI Infrastructure Bet Still Has Believers

A lowered price target of $765 from $770 keeps an Overweight stance on Meta Platforms. The view centers on improving confidence that companies can monetize compute investments through cloud-related revenue streams, even though Meta does not sell cloud services to outside customers. The framework emphasizes accelerating cloud revenues, stable-to-improving margins, and rising backlogs across the AI compute ecosystem. Meta is a major global spender on AI compute and raised full-year capex guidance for Q1 FY2026 to $125 to $145 billion due to component pricing and data center costs. Ad impressions increased 19% year over year, average price per ad rose 12%, and family daily active people reached 3.56 billion. Revenue grew 33% year over year to $56.31 billion, with EPS of $10.44, while Reality Labs posted an operating loss of $4.03 billion.

"Wells Fargo continues to back Meta Platforms ( NASDAQ:META) as a beneficiary of improving market confidence in companies monetizing compute investments directly through cloud business, even though Meta Platforms doesn't sell cloud services to outside customers. The firm maintains its Overweight rating despite the modest target reduction."

"Gawrelski's framework leans on accelerating cloud revenues, stable-to-improving margins, and rapidly rising backlogs across the AI compute ecosystem. Meta Platforms isn't a cloud-as-a-service vendor like its hyperscaler peers. Yet, Meta Platforms is one of the largest spenders on AI compute globally."

"Q1 FY2026 raised full-year capex guidance to $125 to $145 billion, up from the prior range, citing component pricing and data center costs. Ad metrics support the thesis. Meta Platforms' ad impressions rose 19% year over year and average price per ad climbed 12%, while family daily active people reached 3.56 billion."

"Meta Platforms stock has been under pressure since the capex raise, which unsettled investors despite the earnings beat. Shares closed at $602.61 on May 19, down 12% over the past month."

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