Investing.com -- Meta Platforms shares could be poised for a re-rating if the company demonstrates progress in artificial intelligence development and successfully monetizes its growing AI product portfolio, according to Bank of America.

BofA analyst Justin Post reiterated a Buy rating and $835 price target on Meta, arguing that investor concerns about the company’s rising AI spending may ease as returns become more visible.

The firm noted that Meta shares have underperformed since management signaled a significant increase in 2026 operating and capital expenditures, with investors questioning the return on investment from AI-related spending and the impact of higher depreciation costs on margins.

According to BofA, Meta’s expanding compute infrastructure is supporting multiple growth initiatives, including frontier AI model development, improvements in advertising technology and new business opportunities.

Post said AI is already delivering benefits within Meta’s core advertising business by improving content recommendations and ad targeting, helping to drive greater user engagement and advertising spending. He added that further gains could come from the integration of Muse Spark technology.

However, the firm believes investors remain focused on two key factors that could determine whether the stock re-rates higher, highlighting “frontier-level model development over the next 9 months” and “scaled adoption of new AI products.”

BofA also pointed to the emergence of potential revenue streams from AI subscriptions, enterprise offerings and business agents as important catalysts.

As these products move “from concept to release,” the bank expects greater clarity around AI monetization over the next two earnings reports.

The firm added that a combination of stronger AI capabilities, successful product adoption, continued advertising outperformance and new revenue streams could improve investor confidence and support a higher valuation for Meta shares.