After 16% Fall, Analysts Eye a Big Recovery in Meta Platforms

Key Points

• Meta Platforms took a significant hit after its latest earnings report, with shares down over 16% since then.
• However, Wall Street price targets fell much less, indicating a potential opportunity in Meta's shares.
• See why the company's AI capital expenditure plans spooked markets—and spoiler alert—this isn't the first time this has happened.

Meta Platforms NASDAQ: META just saw its biggest post-earnings fall in three years.

Shares dropped by over 11% on Oct. 30 as investors reacted to the company’s Q3 2025 earnings and commentary. This was the biggest down move the Magnificent Seven stock has seen after an earnings report since Q3 2022.

However, based on Wall Street's reaction, you might not know it.

Analyst sentiment held surprisingly firm as the stock dropped, suggesting a potential disconnect between market panic and long-term valuation. Below, we break down the shift in analyst forecasts and examine what’s fueling the fear—and the optimism.

Wall Street Analysts Show Confidence in META After Q3 Plunge

Relatively speaking, Wall Street analysts held to their forecasts on Meta despite its dramatic sell-off. MarketBeat's price target data shows 20 analysts who updated their forecasts. Among these analysts, the average price target moved down by only 5%.

That’s less than half the actual drop Meta shares saw the day after the report.

This divergence widened even further in the days that followed.

Since reporting, Meta shares are down more than 16% as of the Nov. 4 close.

Clearly, the market reacted much more negatively to the results than these analysts did. This is a signal that there could now be an opportunity in Meta shares.

As of Nov. 5, the MarketBeat consensus price target on Meta stands at nearly $827, implying strong upside in shares to the tune of 29%. Notably, analysts who issued or updated their price targets after the company’s Q3 earnings have an even more optimistic view. Among them, the average price target comes in at nearly $857. This number suggests that Meta shares could rise by 37%.

Even the very lowest updated target of $770, which comes from Wells Fargo & Company, implies almost 23% upside. Rosenblatt Securities was one of the few analysts who raised their Meta price target. Their $1,117 forecast on Meta is the most bullish tracked by MarketBeat and indicates shares could gain by 78%.

In no uncertain terms, analysts are demonstrating their confidence that Meta shares will recover in a big way.

Meta’s AI Spending Spree Could Weigh Mightily on FCF in 2026

Meta’s spending forecasts were instrumental to the stock’s post-earnings fall. The company projects capital expenditures (CAPEX) to rise to $71 billion in 2025, up from $39 billion in 2024. Moreover, it warned that CAPEX growth would be “notably larger” in 2026. If that guidance holds, 2026 CapEx could easily exceed $103 billion.

In 2026, projections indicate that Meta’s cash from operations will be $127 billion. Given this, even if Meta’s CAPEX came in only at $103 billion, its free cash flow (FCF) would be around $24 billion. That would be more than 40% below the $42.5 billion in FCF it generated over the last 12 months.

Overall, Meta is saying that it is going to spend massively on AI, which could put significant pressure on FCF next year. For this reason, it is understandable that investors feel alarmed. The company appears to be willing to sacrifice near-term FCF generation to position itself for long-term AI-driven growth.

Despite Fears, Meta Has Shown AI Investing Prowess in the Past

It's worth revisiting Meta's situation in Q3 2022. After that earnings report, shares dropped over 24% to a shockingly low $97. At that time, the company’s advertising business was under pressure, and Mark Zuckerberg was dead set on the metaverse.

However, the firm was also investing in AI to improve ad targeting and delivery. Analysts were downgrading the stock and referencing AI investments as justification for this.

Meta shares then went on an incredible run. As of the Nov. 4 close, Meta trades at approximately $627, gaining more than 380% from that $97 figure. Early investments have helped its AI-powered ad tools achieve an over $60 billion annual revenue run rate, a key contributor to the stock’s performance. This isn’t to suggest that Meta will achieve anywhere close to those types of gains over the next three years. However, it does show that Meta has proven doubters wrong in the past when it comes to investing in AI.