Bank of America Securities on Wednesday reiterated its Buy rating on Meta Platforms Inc. with a price target of $810, citing reduced regulatory risk following a $18 billion settlement with 52 U.S. state attorneys general.
The settlement addresses allegations related to child safety and social media addiction, resolving a multiyear legal cloud that had weighed on investor sentiment. Analyst Justin Post noted the agreement mitigates the risk of a potentially larger jury verdict while allowing Meta’s stock to better reflect upcoming artificial intelligence catalysts.
Meta’s shares rose 1.07% to close at $576.14, with after-hours trading lifting the price to $578.50. The stock’s 52-week range spans from $580 to $1,000, according to data compiled by BMO Capital and Evercore ISI. Evercore maintained an Outperform rating with a $860 target, highlighting a potential maximum settlement value of $16.68 billion.
BofA expects Meta to unveil multiple AI-driven initiatives over the next six months, including the launch of a consumer AI agent platform, Hatch, in the coming weeks and a new AI model, Watermelon, scheduled for October. The bank also anticipates licensing deals, AI capacity agreements, and monetization platforms for messaging ads.
Meta’s revenue growth of 28% and gross profit margins of 82% underpin the bullish outlook, Post wrote in a client note. The company’s legal resolution, combined with its AI roadmap, positions it to capitalize on monetization opportunities despite ongoing scrutiny of its platforms.
The settlement’s broader implications extend beyond Meta. Google’s YouTube is expected to face pressure to adopt similar teen safety measures and contribute to a state teen-safety fund, while Snap may come under increased scrutiny to enhance protections for younger users. Meta also announced security updates for WhatsApp, including an upgraded two-step verification process and additional caller context for unknown numbers to mitigate account takeovers.
European regulators identified addictive design features on Facebook and Instagram two years ago, a backdrop that has shaped the current regulatory environment. The settlement with state attorneys general provides clarity on legal exposure, allowing investors to focus on Meta’s AI-driven growth trajectory.
