Meta Stock Price Forecast - META at $667: AI Ad Powerhouse the Market Is Still Mispricing

NASDAQ:META: AI ad engine on sale after 18% drawdown

Core snapshot and stance

NASDAQ:META trades around $667.55, below the 52-week high near $796.25 and well above the low at $479.80. Market cap is about $1.68 trillion, trailing P/E is roughly 29.5 and the dividend yield is near 0.31%. The stock has corrected around 18% from the peak while the core business continues to deliver about 26% year-over-year revenue growth, more than $80 billion in operating income and over $40 billion in free cash flow. Based on the full data set, the risk–reward still points to a Buy stance, leaning to Strong Buy for investors willing to tolerate volatility and AI capex noise.

Advertising scale, user base and monetization power

Meta’s leverage starts with its family of apps: Facebook, Instagram, WhatsApp and Messenger plus newer assets like Threads and Reels. Roughly 3.5 billion people touch at least one app daily, giving Meta an attention footprint that is almost impossible to replicate. Recent quarters validate the engine: quarterly revenue passed $51 billion for the first time, with family-of-apps contributing about $50.8 billion; revenue grew roughly 26% year over year; operating margins stayed north of 40% and EPS printed around $7.25, roughly sixty cents ahead of consensus. The growth is not coming from user count alone but from higher yield per impression as AI ranking lifts time spent, relevance and advertiser ROI. Video is a clear driver: video consumption on Instagram is up more than 30% year over year and Reels is now running at over $50 billion in annualized revenue. Higher time spent plus better matching allows Meta to raise ad prices by around 10% while impressions still increased by about 14%, a strong sign of pricing power and performance.

AI stack: Lattice, Andromeda, GEM and Advantage+

The stack described across your sources shows a three-layer system plus an end-to-end shell. Lattice unifies what used to be hundreds of small, siloed models into a single multi-domain, multi-objective model space. Instead of one model for feed, another for Stories, another for Reels and additional models per campaign objective, Meta feeds all of these into Lattice. Management has already removed roughly 100 smaller models and expects to retire another 200 as Lattice scales. This means that every interaction improves the global model rather than a local corner. Andromeda handles the first retrieval step, moving from “ads that convert globally” to “ads that convert for this specific user right now,” cutting tens of millions of candidates down to a few thousand using behavioral embeddings, cross-surface signals and context. GEM then ranks and filters that short list, using sequence learning and richer context to select the best handful of ads per impression. Internal commentary puts GEM’s performance uplift at about four times that of the legacy ranking stack and coverage is being rolled out across all major surfaces on Facebook and Instagram. Advantage+ wraps these components into an end-to-end system that lets advertisers set an objective, budget and creative assets or catalog and then offload audience selection, bidding and creative testing to Meta’s AI. Management has already disclosed that Advantage+ is tracking at about $60 billion in annualized revenue, which is a critical sign that the AI stack is not theoretical; it is already monetizing at scale.

Financial quality, margins and cash generation

On trailing figures, Meta delivered around $189 billion in revenue, approximately $81.9 billion in operating income and roughly $42.7 billion in free cash flow, even after heavy AI-related capex. Third-quarter operating cash flow alone was about $30 billion and the company ended the period with roughly $44.5 billion in cash and an immaterial level of debt relative to its valuation. Operating margins in the 40% area and ROIC near 25% confirm that this is still a very high-quality cash compounder despite the metaverse drag. Sell-side projections in your sources call for EPS growth of about 31% in the next year and around 11% in the following year. If those trajectories materialize, Meta moves into a sub-20x forward P/E by 2027 at today’s price, which is not aggressive for a business with these margins, network effects and optionality.

Capex ramp, AI build-out and ROIC pressure

The major swing factor is capital intensity. For 2025, Meta is guiding to capex including finance leases of around $70–72 billion, up from roughly $65 billion over the last four quarters. That equates to more than 30% of expected full-year revenue. The spend is going into GPUs and accelerators, power and data centre build-out, training and serving capacity for the upcoming proprietary Avocado LLM, and a range of generative and ranking models embedded across the apps. The risk is straightforward: if incremental returns on this capex fall short, ROIC compresses and the equity multiple contracts. Meta will not own the AI world uncontested; Microsoft, Google, Amazon and well-funded private labs are also scaling infrastructure. However, the current ROIC starting point is high enough that even a five-point decline leaves the company in elite territory and the existing stack of Lattice, Andromeda, GEM and Advantage+ already proves that internal AI use generates real economics through higher ad yield and time spent.

Reality Labs, metaverse losses and potential cost lever

Reality Labs remains the most obvious financial drag. Over the last four quarters, operating losses in that segment have run near $18–19 billion. That is more than ten percent of group revenue and a material headwind to consolidated margins and EPS. The reporting you shared suggests management is discussing around 30% budget cuts for the Metaverse unit. If that happens, it implies $5–6 billion in annual savings and roughly a ten percent uplift in current net income on its own. The 2022 episode, when NASDAQ:META fell below $150, already showed how sensitive the market is to the balance between long-dated VR bets and near-term profitability. Cutting the burn while maintaining selective strategic investment would directly support EPS, FCF and buybacks without undermining the long-term option value.

New AI products, LLMs, wearables and WhatsApp monetization

Beyond the core ad engine, Meta is building additional levers. The Avocado LLM, expected in early 2026, will be proprietary instead of open-source like Llama, which already saw more than a billion downloads. That adoption base plus Meta’s unique social and content data can give Avocado a strong training advantage. The acquisition of Limitless and its AI voice recorder pendant adds a new interface layer, potentially turning recorded conversations into structured knowledge and summaries that integrate with WhatsApp, Messenger or Work tools. Messaging monetization remains underpenetrated relative to engagement; business messaging, catalog tools, click-to-WhatsApp ads and eventual payment flows can raise revenue per user meaningfully. These initiatives are not required for the current valuation to make sense, but they extend the growth runway and diversify the AI opportunity set beyond ranking ads.

Governance, regulation and competitive landscape

Control remains concentrated with Mark Zuckerberg and the recent board departure of Dina Powell McCormick adds a modest governance headline but does not change strategic direction. Regulatory pressure is a constant background risk: data privacy, teen usage rules, platform obligations in Europe and decisions such as forcing WhatsApp to allow rival AI chatbots can all raise compliance cost or limit certain product designs. Competition for attention from TikTok, X and Snap persists, while in AI Meta faces giants with their own cloud and enterprise ecosystems. However, Meta’s social and messaging network effects remain powerful, advertisers prioritize return on ad spend and many regulatory frameworks ultimately entrench the largest players that can absorb fixed costs. The key is continued discipline on data handling, content controls and internal governance so that regulatory events do not trigger outsized financial or reputational shocks.

Technical setup around 667 USD and near-term tape

On the short-term chart, NASDAQ:META is trading near $667.55 with an intraday range of roughly $662.20–$668.18. The stock has repeatedly stalled in the $670–680 resistance band while respecting a rising trendline from mid-November, currently clustered around the mid-$650s. A clean break and close below that line would open the way toward the $645–650 area, where earlier consolidation created a demand zone; holding it keeps the medium-term bullish structure intact. Parabolic SAR has flipped above price, confirming that upside momentum has cooled and the tape is in consolidation rather than acceleration. Chaikin Money Flow has slipped slightly negative, signalling light distribution but not capitulation. In practice, this is a textbook digestion phase after a strong run from the sub-$500 region, not a broken uptrend, and it offers a better entry profile than chasing at $780–800.