Meta’s stock is down more than 7% year to date. The company spent much of this year defending its decision to pour hundreds of billions of dollars into AI infrastructure, and investors who followed the Q1 earnings call on April 29 watched the stock drop another 6% to 7% after the company raised its capital spending guidance again.
Wall Street has had questions about Meta’s AI bet all year.
Bank of America just signaled it has heard enough of that debate. On July 9, the bank added Meta to its US 1 List, an internal designation it reserves for its highest-conviction buy-rated ideas.
It is a meaningful step up from a standard buy rating, and it comes from analysts who have been covering Meta closely enough to raise their price target twice in the last three months.
Bank of America adds Meta to US 1 List with $835 price target
The analysts behind the call are Justin Post and Nitin Bansal. Post, a 5-star analyst on TipRanks with a 62.5% success rate and 20.9% average return per rating, has been one of the more consistent Meta bulls on Wall Street.
The pair’s current price target is $835, raised from $820 after Meta’s Q1 earnings in early May, as TheStreet reported. With Meta trading around $612, that target implies roughly 36% upside from current levels.
Post and Bansal’s reasoning comes down to two things they want to see Meta prove. First, that it can reach frontier-level AI model capabilities within the next nine months. Second, that its new AI products are gaining real adoption. If both happen, they believe the stock can re-rate considerably higher from where it sits today.
Right now, Meta trades at roughly 18 times revised 2027 earnings estimates, below its historical average of 21 times. For a company that BofA projects will generate $254.6 billion in revenue in 2026 and $311.3 billion in 2027, it’s not hard to argue that multiple is cheap.
Why BofA says Meta’s AI spending is an investment, not a problem
The biggest drag on Meta’s stock in 2026 has been the capital spending. Meta has raised its capex guidance multiple times and is now projecting total infrastructure investment of roughly $850 billion between 2026 and 2030. That is a number that has made investors nervous about how long the payback period will be.
Post and Bansal push back on that read. Their view is that Meta’s core advertising business is strong enough to absorb the spending while AI improvements compound on top of it.
Meta’s Q1 numbers support that. Revenue came in at $56.31 billion, up 33% year over year, according to CNBC, beating analyst expectations by roughly $860 million. EPS of $7.31 beat the consensus of $6.67 by $0.64. The company has beaten on both lines in each of the last four quarters.
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BofA’s AI thesis for Meta is not only about making ads better. Post and Bansal believe Meta could eventually commercialize its AI infrastructure as a cloud business, selling computing access to outside customers.
If Meta monetizes half of its projected 19 gigawatts of computing capacity at market rates, BofA calculates that could generate between $100 billion and $150 billion in additional revenue on top of the existing advertising business.
“Meta is building a strategically valuable asset at a time when global AI capacity remains scarce,” Post and Bansal wrote in their note.
What’s in Meta’s AI product pipeline heading into second half of 2026
Meta has not been standing still on the product side. The company launched Muse Spark 1.1 in late June, a multimodal AI model designed for agentic coding that puts it in direct competition with OpenAI and Anthropic.
Meta AI’s first image generation model, Muse Image, launched the same week. The Meta Superintelligence Lab is now producing public releases, not just internal research.
On the infrastructure side, Meta announced a $9.1 billion data center in Alberta, Canada on July 8, its first in the country and its 33rd facility worldwide. That project is a 1-gigawatt AI-optimized facility, according to Meta.
The company is also working on its own MTIA processor, which Post flagged as a potential catalyst for reducing long-term infrastructure costs.
BofA sees AI flowing into Meta’s advertising engine in increasingly direct ways. Better content recommendation systems are lifting user engagement. More precise ad targeting is increasing advertiser spending. And as large language models get more deeply integrated into Meta’s ad stack, those improvements should compound.
BofA expects each of Meta’s major platforms, including Threads, Meta AI, Marketplace, and messaging, to become additional monetization channels over time.
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What Wall Street consensus on Meta stock looks like right now
BofA is not alone in its conviction. Of 37 analysts currently covering Meta, 32 rate it a buy and five rate it a hold. Nobody has a sell, according to TipRanks.
The average price target across those analysts is $818.23, implying about 34% upside from current levels. Citizens, Mizuho, and Jefferies have all recently reiterated positive ratings with targets clustered between $825 and $835.
Jefferies specifically compared Meta’s potential cloud strategy to how Amazon built AWS by monetizing excess capacity.
The move onto the US 1 List is BofA’s way of putting Meta at the front of that pack. It signals the analysts see a specific window where the combination of valuation, product momentum, and potential new revenue streams makes Meta one of the most attractive large-cap AI plays available right now.
What Meta investors should watch in the second half of 2026
Post and Bansal laid out their two conditions clearly:
- A frontier-level AI model release within nine months
- Demonstrated adoption of new AI products
The second half of 2026 should start answering both of those questions. Meta’s Q2 earnings are scheduled for July 29, and BofA expects revenue there to give investors more confidence that Muse Spark is beginning to move the advertising needle.
The cloud business thesis is longer-dated. Building and profiting from an enterprise cloud business takes years. Amazon and Google both spent heavily before AWS and Google Cloud hit profitability.
Meta would be starting from scratch in that market, even with a massive computing base to monetize. Post and Bansal acknowledge the risk, but their argument is that the infrastructure is being built either way, and the option to monetize it externally represents upside that the current stock price does not reflect.
Meta’s stock has recovered 14% over the past month, even as it remains down on the year. BofA’s US 1 List designation is a signal the bank sees more room to run from here, and the framework Post and Bansal have laid out gives investors specific milestones to track as they decide whether to follow that conviction.
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