JPMorgan Pumps Up Meta on AI Push, Sees 30% Upside Potential

Meta Platforms has received an upgrade from JPMorgan to 'buy' from 'neutral', with a price target of $820, indicating a potential 30% upside. This decision is based on the company's recent artificial intelligence (AI) launches, which are seen as a sign of a broader product cycle.

The new Muse AI agent app has reached number three in the US app store on its second day, with early usage running at 10 times that of training cohorts. Analyst Doug Anmuth notes that while monetization is not the immediate priority for Muse, the addressable market could eventually reach into the tens of trillions of dollars.

However, JPMorgan also forecasts that stronger AI adoption will increase Meta's need for computing capacity, potentially straining its free cash flow in 2027 and 2028. The bank estimates that annual figures could turn negative by $65 billion to $75 billion, but this view does not include any contribution from AI product monetization.

Despite these concerns, JPMorgan believes that Meta still has room to improve its core advertising business through AI-driven gains in content recommendations and engagement. This combination leaves further upside for the stock even as investment demands rise.