META stock: Analyst frames bull vs. bear debate into the New Year

Investing.com -- Meta Platforms presents both risks and opportunities heading into 2026, according to Baird, which frames the stock as a “battleground” following recent underperformance.

Analyst Colin Sebastian urged investors to “be opportunistic buyers,” noting that while near-term sentiment risks remain, “embedded expectations are in better balance vs. three months ago.”

Baird highlighted several potential catalysts for a more constructive outlook, including a “clearing event with Q1 guidance/margin outlook,” the “launch of next Llama model built by TBD Lab,” updates to Meta AI, and “ramping WhatsApp and Threads monetization.”

The analyst also pointed to ongoing improvements in ranking, relevance, and engagement metrics, as well as further penetration of Adv+ automation and the option value from wearables and custom silicon.

The bear case, Baird noted, stems largely from concerns that Meta is “lagging in AI,” with limited visibility into how the narrative will evolve.

Additional headwinds are said to include “uncertain ROI on infrastructure investments, tougher revenue and KPI comps, slower monetization of newer surfaces,” and TikTok’s resurgence in the U.S.

Despite these challenges, Sebastian argued that many concerns are now “appropriately embedded in expectations,” after META underperformed the Nasdaq by more than 20 percentage points over the past six months.

Baird also cited the company’s track record navigating disruptions such as the mobile app transition and IDFA headwinds.

“Shares trade at roughly 10-11x NTM EV/EBITDA, slightly below historical averages and peers, including Alphabet, Reddit, and Snap,” stated Sebastian.

The analyst concluded that as Meta demonstrates progress with AI and Llama, investors may increasingly focus on “market-expanding opportunities” in 2026.

You May Also Be Interested In

• Active options: META RIOT ORCL MSFT RKLB AMD NFLX ACHR PLUG HIMS ASTS
• Kepler Cheuvreux Upgrades Zehnder Group AG (ZEHN:SW) to Buy
• Piper Sandler Starts LightPath Technologies (LPTH) at Overweight