Morgan Stanley Lowers Meta Platforms Price Target on Ad Weakness and AI Costs

Morgan Stanley has revised its price target for Meta Platforms (META) downward to $775, reflecting concerns over a cooling advertising market. The investment bank noted that increased capital expenditures related to artificial intelligence infrastructure are weighing on the company's financial outlook. Analysts at the firm now forecast that revenue for the second quarter and the full year 2024 will likely fall below consensus estimates. This adjustment comes as Meta continues to pivot aggressively toward AI, a move that requires significant upfront investment. While the long-term potential of AI remains, the immediate impact on margins and ad revenue growth has prompted a more cautious stance from the bank. Consequently, investors are closely monitoring how these rising costs will balance against future monetization strategies.