Wall Street analysts hate looking wrong, but they hate looking late even more.
A price target is supposed to be a 12-month estimate of where a stock should trade. In practice, it works more like a bookmark that gets moved whenever the story changes.
Most of the time, those moves are small. An analyst trims $10 after a messy earnings call or adds $15 after a clean one, and almost nobody outside a trading desk notices.
The big jumps come when a stock runs straight past the old number. At that point, the analyst can either cut the rating or find a reason the shares deserve to keep climbing.
I’ve watched analysts pick the second option dozens of times while covering big tech. It usually tells you more about momentum than about value.
That’s why one recent reversal caught my eye. In late July, one of the more bullish firms on Facebook’s parent trimmed its target after a rough earnings report.
On Friday, Sept. 25, that same firm raised its target by $90. The firm is Piper Sandler, the stock is Meta Platforms (META), and the reason is a product Piper admits it hasn’t put in its own forecasts.
Why AI spending spooked investors after the July report
To understand the reversal, you have to go back to Meta’s second-quarter report on July 29. Revenue climbed 28% from a year earlier to $60.8 billion, according to a statement from Meta.
The spending told a different story. Capital expenditures hit $31.08 billion in the quarter, which left Meta with just $784 million in free cash flow.
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The company also lifted the floor on its full-year spending plan.
“We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $130-145 billion, narrowed from our prior outlook of $125-145 billion,” Meta said in the same statement.
Earnings per share fell 13% to $6.18, well short of the $7.22 analysts expected, reported TradingKey. The shares sank more than 7% after hours to $541.44.
Piper trimmed its target to $785 from $800 the next day while keeping its Overweight rating, according to MarketScreener.
In my analysis, that cut said less about Meta’s ad business than about cash. When a company pours nearly all of its operating cash into data centers, analysts start asking when the payback shows up.
Piper Sandler raises the stakes on the Muse agent
Eight weeks later, Piper analyst Thomas Champion raised the target to $875 and kept the Overweight rating, according to Benzinga.
The firm is “increasingly bullish on Meta following Connect and the launch of the Muse agent,” reported TheFly.
Muse is a personal AI agent that launched in early September and works across a user’s devices and accounts, reported TechCrunch. Instead of only answering questions, it books appointments, logs meals, and helps people buy products.
“The centerpiece of our vision for what we’re building is Muse,” Meta CEO Mark Zuckerberg said at Connect, the outlet reported.
The detail that jumped out at me sits in the middle of Piper’s note.
Muse “is not included in Piper’s estimates,” yet the firm laid out a forecast showing $44 billion in 2030 revenue from the agent, according to TheFly.
Piper sees that money coming from advertising, subscriptions, and a take rate, meaning a small cut of each purchase made through the agent.
The firm added that product launches and “better strategic focus can drive multiple expansion,” meaning investors may pay more for every dollar Meta earns.
Zuckerberg’s pitch also impressed the firm. He sees a future where AI tools are “broadly distributed, drive abundance and improve lives,” according to Investing.com.
Wall Street firms race to reprice the Facebook parent
Piper had plenty of company. Here’s how other firms moved after Connect:
- TD Cowen raised its target to $865 from $750 and models Muse revenue growing from $55 million in 2026 to $27 billion by 2031, according to 24/7 Wall St.
- Canaccord Genuity lifted its target to $950 from $930 after Muse topped 2.5 million downloads in two weeks, citing Sensor Tower estimates, reported Investing.com.
- Deutsche Bank moved its target to $820 from $750 with a Buy rating, reported The Bull.
- JPMorgan raised its target to $920 from $820, calling Muse a potential breakout consumer app, as TheStreet reported on the JPMorgan call.
- BMO Capital stayed on the sidelines with a Market Perform rating and a $580 target, according to Investing.com.
Not every bet on Muse is smooth. Amazon has already moved to keep the agent off its platform, as TheStreet reported on Amazon’s Muse block, even as Walmart, Best Buy and Sephora signed on as partners.
Sizing up the $44 billion revenue forecast
I ran Piper’s number against Meta’s own results. Second-quarter revenue of $60.8 billion works out to about $243 billion on an annualized basis.
A $44 billion Muse business would equal roughly 18% of that run rate, from an app that launched Sept. 8.
It’s also a much bolder call than TD Cowen’s. Piper’s 2030 figure is about 63% higher than what Cowen expects Muse to bring in a full year later.
The stock price explains the timing. Meta closed at $777.59 on Thursday, Sept. 24, reported Investing.com, which left the shares just $7.41 below Piper’s old $785 target.
That close also marked a gain of about 44% from the $541.44 after-hours level following July’s earnings. When a stock sits that close to your target, you either raise the target or tell clients to stop buying.
Profit estimates keep falling even as shares rally
Not everyone is sold. Meta shares fell 3.64% to $749.30 on Friday, even as the target hikes rolled in, reported The Bull, which pointed to profit-taking after a sharp run.
Earnings forecasts are drifting the other way. Of 49 analyst revisions to Meta’s 2026 earnings per share estimates, 45 pointed lower, according to 24/7 Wall St.
The stock trades at about 22 times forward earnings, and the consensus target of $786.80 sits well below Piper’s new number, the outlet added.
What the Meta stock debate means for your 401(k)
If you own an S&P 500 index fund or a large-cap growth fund, you already own Meta. This debate lands in your retirement account whether you pick stocks or not.
At Friday’s close, Piper’s $875 target implies about 17% upside. That’s an attractive number, but it depends on revenue from a product the firm itself left out of its model.
In my analysis, the bigger signal is what Wall Street now grades Meta on. In July, analysts judged the company by how much it spent, and this week they judged it by what Muse might earn.
The next checkpoint is Meta’s third-quarter report. The company guided for revenue of $61 billion to $64 billion, and investors will want early Muse numbers sitting right next to the spending bill.
Price targets can move $90 in eight weeks. Free cash flow is what eventually has to pay for them.
Related: Bank of America backs Meta stock after Muse surprise
