Guggenheim raises Meta (META.US) price target to $850: betting on commercializing AI intelligence

According to Woofun AI, Meta (META.US) (formerly Facebook) is gradually narrowing the gap with Anthropic in the competitive landscape in the field of artificial intelligence. This technological evolution has provided Guggenheim Securities with a core basis for strengthening the logic of looking bullish. The agency maintains a 'buy' rating for Meta (META.US), and its core idea is that Meta (META.US) is trying to turn underlying technological advantages into substantial commercial value through the Muse AI agent, thereby establishing a moat in the midst of a fierce AI arms race.

Analyst Michael Morris raised the target price for Meta (META.US) from $700 to $850 in a research report released on October 14. This adjustment is mainly based on an increase in profit expectations for 2027 and a repricing of long-term development opportunities for AI agents. In the artificial intelligence analysis index constructed by Guggenheim Securities, Meta (META.US) ranked second with a score of 56, below Anthropic's 58 points, showing its top competitiveness within the industry.

Notably, the agency believes that the implementation of the Muse Wonder model's functionality will be a key catalyst, and once it is transformed into a more practical AI agent, it is expected to directly drive the stock price upward. According to data compiled by Woofun AI, Guggenheim Securities's 2027 capital expenditure forecast for Meta (META.US) has been raised from US$2030 billion to US$225 billion, reflecting the agency's recognition of its continued intensive investment in AI infrastructure.

In terms of product performance, Muse had 1.3 million daily active users five weeks after launch, a significant increase from 300,000 in the first week. However, this figure accounts for only about 0.05% of Meta (META.US)'s 3.6 billion daily active users, and the penetration rate is still extremely low. Guggenheim Securities pointed out that Meta (META.US)'s strategy is to prioritize driving usage over short-term revenue, providing products to consumers for free, and then charging companies to obtain user access rights. This is highly consistent with the economic model of the core advertising business. Analysts emphasized that Muse's main method of profit will be for companies to pay for reaching out to consumers through AI agents rather than relying on consumers to pay directly.

Although free cash flow is expected to remain under pressure until 2028, and competitor breakouts may force Meta (META.US) into a long-term spending race, its global performance in WhatsApp and Reels (versus TikTok) has proven its potential to become a leader in AI.

Looking ahead, Guggenheim expects the commercialization process of AI agents to accelerate after 2027, which is the core logic underpinning the current high valuation. In the third quarter earnings call, the agency expected management to clearly link stronger models with stronger AI smart businesses; otherwise, the model development competition may simply become a competitive factor that increases costs. As of Wednesday's release, Meta (META.US) (formerly Facebook) shares had fallen 3.17% to $738.32, and the market is still digesting the balance between this long-term investment narrative and short-term financial pressure.