Bank of America Analyst Reiterates Buy Rating for Meta Amid New AI Model and Chip Partnership
On September 7, Bank of America analyst Justin Post reiterated his 'Buy' rating for Meta (ticker: META) with a $810 price target. This represents approximately 32% upside from the stock's closing price on September 3 at around $613.62. The firm highlighted Meta’s recent release of Muse Spark 1.3, an AI model optimized for coding and agentic tasks that improves efficiency by reducing token usage compared to its predecessor. In addition to advancements in AI models, Bank of America emphasized the significance of Meta's custom chip strategy through a partnership with Broadcom (ticker: AVGO). The collaboration involves delivering three generations of Meta’s Training and Inference Accelerator chips over 2026–2027. BofA estimates these deployments could account for up to 20% of Meta’s AI capacity, potentially offering long-term cost and performance advantages similar to Alphabet's TPU strategy. Meta is also working on a consumer AI agent codenamed 'Hatch,' which the firm believes will benefit from its improved agentic capabilities. Despite regulatory challenges, BofA argues that Meta’s valuation at around 18 times GAAP earnings for 2027 remains attractive compared to historical multiples and broader market valuations.
Topics: AI models Bank of America Meta Muse Spark stock analysis