Meta Platforms, Inc. (NASDAQ:META) is one of the  AI Stocks Hit with New Analyst Ratings. On August 26, Bernstein analyst Mark Shmulik gave his thoughts on digital ad winners, battleground stocks, and the major question of whether Meta can close the gap with Google. The firm has an Outperform rating on the stock with a $900 price target.

The firm is bullish on the stock considering its robust AI efforts. The tech giant’s core AI investment is paying off, but they come at a cost.

Nevertheless, it believes that Meta is the only publicly traded Consumer AI play that’s delivering real results, and that its believes that “core AI gains continue.”

“Meta’s revenue grew 22% Y/Y in Q2, and the Q3 revenue guidance of $47.5-50.5B, or 17-24% Y/Y (16-23% FxN), was far beyond the most bullish bogey. Impressions and price growth were both strong as AI efforts to drive deeper consumer engagement and improvement advertiser efficacy paid off. Meta’s Core AI investment is clearly paying off, but these investments come at a cost, with 2025 expense/CapEx guidance up by ~$1B/$2B, at the top end, respectively. Management also commented that expenses are likely growing 20%+ Y/Y in 2026 tied to all those AI hires and server depreciation, while CapEx is set to grow another $30B Y/Y to ~$100B.”

When asked about when Meta will catch Google in search, the firm stated that “Meta is on pace to catch Google Search in ad revenues by the end of 2026.”

While we acknowledge the potential of META as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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