Meta Platforms (META) stocks surged 10% after impressive Q4 earnings and positive guidance for the current quarter, with projected capital expenditures doubling to $135 billion in 2026. Despite a recent rally, META remains 7% below its 52-week high, with operating margin expected to compress by 5% this year.

Jefferies’ analyst remains optimistic, stating overbought conditions are no cause for concern. Meta’s aggressive spending on AI is paying off, optimizing ads and boosting engagement to exceed Q4 sales expectations by over a billion dollars. With a $910 price target, META shares could see a 23% upside.

META’s Llama 4 lagged behind competitors, but upcoming text and image models may change that narrative, according to Jefferies. WhatsApp, Meta’s most under-monetized app with the highest DAUs, has a revenue run rate of $9 billion and potential quadruple growth in the next four years. Wall Street firms agree META stock is a strong buy, with a consensus rating of “Strong Buy” and mean target of $833 for a 14% upside.

Read more at Yahoo Finance: Meta Platforms Breaks Into Overbought Territory on Post-Earnings Rally. Is There Room for More Gains Ahead?