Meta Stock: Morgan Stanley Sees 30% Upside as AI Bets Pile Up

TLDR

• META stock is down nearly 10% in 2026 and around 25% from its August 2025 peak near $800, wiping out roughly $500 billion in market value.
• Morgan Stanley has META as a top pick with a $775 price target, implying around 30% upside from current levels.
• Meta launched its AI-powered Business Agent on Wednesday, expanding across WhatsApp, Messenger and Instagram for businesses of all sizes globally.
• Meta’s AI chatbot could generate $10 billion in annual revenue if less than a third of its 3.5 billion daily users run a single query per day, per Morgan Stanley.
• Meta posted $56.3 billion in Q1 revenue, beating Wall Street expectations, and guided Q2 revenue to between $58 billion and $61 billion.

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Meta Platforms has had a busy Wednesday. The company launched its Meta Business Agent — an AI tool that lets businesses automate customer interactions across WhatsApp, Messenger, and Instagram. It can answer questions, book appointments, qualify leads, and close sales in local languages.

Meta Platforms, Inc., META

More than one million businesses are already using some version of it on WhatsApp and Messenger. The expanded rollout is free to start, with paid subscription tiers planned for later this year.

CEO Mark Zuckerberg told an event in London on Wednesday that the new agent will “take on more and eventually help you run your whole business.”

That’s a big claim. Whether the market buys it is another question.

META stock is down nearly 10% in 2026, making it the weakest performer among the Magnificent Seven. It trades around $596, roughly 25% below the near-$800 peak it hit in August 2025. That decline has erased around $500 billion in market value.

The stock is barely holding onto its place in the top ten of the S&P 500, with Micron Technology and Berkshire Hathaway closing the gap.

What Morgan Stanley Sees

Morgan Stanley analyst Brian Nowak isn’t deterred. He rates META as a top pick and carries a $775 price target — implying gains of roughly 30% from current levels.

“Sentiment has troughed,” Nowak wrote in a note published Wednesday. He argues that the current valuation discount to megacap peers misses how deep Meta’s engagement and monetisation moats actually are.

Nowak points to four developing products he thinks can move the stock higher. Meta AI is top of the list.

He estimates that less than a third of Meta’s 3.5 billion daily active users generating a single query per day could drive $10 billion in annual revenue growth and an 8% lift to his 2028 earnings estimate of $35.79 per share. Heavier usage could push that to 20% upside.

Subscriptions are another lever. Nowak sees those adding another $7 billion in revenue and $2 in earnings growth as Meta starts converting its audience into paying users.

The Spending Problem

The hang-up for investors is Meta’s capital expenditure plan. The company has outlined $600 billion in total capex, including $350 billion over the next two years. That’s a lot of money, and visibility on returns is still low.

Reality Labs remains a cash drain. Quest headsets and AI glasses haven’t made a meaningful dent in the financials.

On the fundamentals, though, Meta is still delivering. Q1 revenue came in at $56.3 billion, beating forecasts. Q2 guidance is set at $58 billion to $61 billion.

Meta’s in-house reasoning tool, Muse Spark, drove a 10% increase in time spent on Instagram Reels and an 8% lift for Facebook video — the best engagement numbers in four years.

The Business Agent Platform also now integrates with Shopify, Zendesk, and Shopee, giving businesses tools to build and deploy agents at scale.