Wells Fargo raises Meta price target to $1,000 on Muse momentum

Wells Fargo raised its price target on Meta to $1,000 per share from $796 on Tuesday, the highest target among analysts tracked by FactSet, according to MarketWatch. Analyst Ken Gawrelski kept an Overweight rating and said investor enthusiasm around Meta’s Muse AI agent is warranted.

The $1,000 target implies roughly 35% upside from current levels, and it is his second increase in about two weeks, following a raise to $796 from $640 in late September on early Muse demand. Meta’s stock has gained nearly 20% since Muse launched on September 8, compared with a 1.5% rise in the S&P 500 over the same period.

A Reels-sized product cycle, potentially larger

Gawrelski framed Muse as the start of a new product cycle and compared it with the early days of Reels. In Wells Fargo’s note, he described fiscal 2027 as a trough earnings-per-share year within that cycle, “akin to 2022 beginning of Reels,” but said Muse could power a much larger, AI-driven cycle, according to CNBC’s reporting on the note.

In the bank’s most upbeat scenario, continued strength from Muse, Reels, and the core advertising business could drive Meta’s stock to $1,211.

A dose of caution for 2027

The bullish target comes with a near-term warning. Gawrelski called for a “dose of caution” going into Meta’s third-quarter earnings, expected later this month, anticipating a hit from litigation costs and a ramp-up of infrastructure spending to support Muse’s trajectory.

Wall Street had been speculating that Meta might begin leasing out its data-center capacity as a high-margin way to monetize its AI infrastructure. Gawrelski instead removed 500 megawatts of capacity resales, representing roughly $5 billion in potential revenue, from his 2027 forecast, noting that Muse’s growth means Meta will need to keep all of that processing power for itself.

For 2027, Wells Fargo expects operating expenses of $210 billion to $215 billion, above the Street consensus of about $202 billion, and capital expenditures of $250 billion — a significant step up from the $130 billion to $145 billion Meta projects for 2026.

Wall Street’s Muse divide

The call puts Wells Fargo at the top of a wide analyst spread on Meta. TipRanks data shows an average 12-month target of $806.13 from 46 analysts: JPMorgan raised its target to $920 last month, while BMO Capital keeps a $580 target with a Hold rating.

Analyst enthusiasm for Muse has been building all month. On Monday, Citi estimated Muse could generate more than $27 billion in annual revenue by 2030, and multiple outlets reported Muse has surpassed 3 million weekly users who send at least one prompt, per The Information.

The question behind every target is monetization. Wells Fargo expects Meta’s near-term commentary on Muse revenue to stay muted, with meaningful financial contributions expected further out. The Q3 earnings call later this month is the next signal. Gawrelski expects Meta to temper expectations there, which means the bank’s thesis rests on 2028 and beyond, when AI product revenue starts stacking on top of the ad business.