Guggenheim raises Meta (META.US) target price to $850: Betting on AI agent commercialization

According to Woofun AI, Meta (META.US) (formerly Facebook) is gradually closing the gap with Anthropic in the artificial intelligence sector, and this technological evolution serves as a core basis for Guggenheim Securities’ reinforced bullish logic. The institution has maintained its 'Buy' rating on Meta (META.US), with the central viewpoint that Meta (META.US) is aiming to convert its underlying technological advantage into substantial commercial value through the Muse AI agent, thereby establishing a moat in the fierce AI arms race.

Analyst Michael Morris, in a research report released on October 14, significantly raised Meta’s (META.US) target price from $700 to $850. This adjustment is mainly based on upgraded profitability expectations for 2027 and a repricing of long-term opportunities for AI agents. In the artificial intelligence analysis index built by Guggenheim Securities, Meta (META.US) scores 56, ranking second only to Anthropic’s 58, highlighting its top-tier competitiveness in the industry.

It is worth noting that the institution believes the practical implementation of the Muse Wonder model will be a key catalyst. Once converted into a more practical AI agent, it could directly drive the stock price higher. According to data compiled by Woofun AI, Guggenheim Securities has raised its capital expenditure forecast for Meta (META.US) in 2027 from $203 billion to $225 billion, reflecting the institution's recognition of Meta’s sustained high-intensity investment in AI infrastructure.

In terms of product performance, Muse reached 1.3 million daily active users five weeks after launch, a significant increase from the 300,000 in the first week. However, this figure only accounts for about 0.05% of Meta’s (META.US) 3.6 billion daily active users, indicating a still very low penetration rate. Guggenheim Securities points out that Meta’s (META.US) strategy is to prioritize usage rates over short-term revenue by offering the product free to consumers and charging businesses for user access rights. This is highly consistent with the economic model of its core advertising business. The analyst emphasizes that Muse’s main profit source will be businesses paying to reach consumers through AI agents, rather than relying on direct consumer payments.

Although free cash flow is still expected to be under pressure until 2028 and breakthroughs by competitors may force Meta (META.US) into a long-term spending race, its global performance in WhatsApp and Reels (competing with TikTok) proves its potential to become a leader in the AI space.

Looking ahead, Guggenheim Securities expects the commercialization of AI agents to accelerate after 2027, which is the core logic supporting the current high valuation. During the third quarter earnings call, the institution expects management to establish a clear link between stronger models and a more robust AI agent business, otherwise the competition in model development risks becoming merely a cost-increasing factor. As of Wednesday’s report, Meta (META.US) (formerly Facebook) saw its share price fall by 3.17% to $738.32, with the market still balancing between the long-term investment narrative and short-term financial pressures.