Meta stocks are the worst in the Seven. Why did Wedbush call them a "best idea"?

Analyst Wedbush included Meta shares in its "best ideas" list, despite the fact that the securities fell sharply in price after the latest quarterly report and were the worst performing of the "Magnificent Seven" IT giants. Investors are concerned that the company is spending too much on artificial intelligence. Wedbush, on the other hand, sees no problem with Meta's growing capital expenditures and notes that AI is already strengthening the company's advertising business.

Wedbush analyst Scott Devitt listed Meta as one of his top investment ideas on Thursday, Nov. 13, MarketWatch reported. "Management's decisions indicate solid demand in the core business and a commitment to long-term strategic objectives," Devitt said.

According to Wedbush, Meta's investments in artificial intelligence are already bearing fruit: AI technology is driving growth in the company's key advertising business, and in the long term it will have a positive effect on its Reality Labs division, which develops AI devices. In the future, Devitt predicts that Meta will be able to monetize AI in other areas, including AI agents for businesses.

Devitt noted that "the risk/reward ratio looks attractive, especially after the recent correction in quotes". The analyst confirmed the rating "Above market" (Overweight) for Meta shares and target price of $920. It assumes growth of securities' value by 51% in comparison with the last closing price.

In trading on Nov. 13, the company's shares were cheaper at the moment by almost 1% - the price fell to $603.

Since Meta Platforms published its quarterly report last month, the company's securities have fallen by 20%. Meta's shares are now the worst in terms of growth over the past year in the "Magnificent Seven" of American IT giants, and only Tesla is weaker than it in terms of dynamics in 2025.

Meta reported a 26% year-over-year revenue growth for the third quarter, driven in part by AI tools for targeted advertising and content recommendation systems. Meta CEO Mark Zuckerberg said on the earnings call that the company needs to accelerate its investment in AI. Meta plans to have between $70 billion and $72 billion in capital expenditures in 2025 (the previous forecast called for $66 billion to $72 billion).

The only bear to advise selling the stock, BNP Paribas analyst Stefan Slowinski, warned that the company's aggressive investments in artificial intelligence are putting pressure on profitability and preventing it from creating value for shareholders.

But most analysts still advise buying Meta shares: they have 53 Buy ratings and 11 Overweight ratings versus only eight Hold (a "hold" advice) and one Sell (a sell recommendation), MarketWatch shows. The average target price is $839.34, up 38% from the last closing price.

This article was AI-translated and verified by a human editor