5 reasons why Jefferies thinks Meta's pullback is a buying opportunity

Investing.com -- Meta’s sharp decline has opened a compelling entry point, according to Jefferies, which called the stock a “Top Pick” and outlined five reasons why the pullback should be bought in a note to clients this week.

Analyst Brent Thill says Meta now trades at “an 8-turn NTM PE discount to GOOGL,” a gap created by concerns over margins, capex and AI execution but one that offers “meaningful upside if META addresses these headwinds.”

Jefferies sees limited downside to estimates and potential for positive revisions through 2026.

Even if Meta guides 2026 capex above the Street’s approximately $110 billion and operating expenses above around $150 billion, Jefferies does “not expect this to surprise investors,” noting that management often guides conservatively and that Q4 is likely to be viewed as “peak pressure.”

The firm also highlights progress in Meta’s artificial-intelligence efforts. It says new “All-Star AI hires” are expected to deliver a stronger frontier model in early 2026, helping the company “right the ship” after earlier challenges with Llama 4.

Jefferies believes Meta can continue to strengthen its “Core Flywheel powered by AI” this year by stacking gains in recommendation and conversion systems.

Finally, Jefferies points to accelerating “incremental revenue engines.”

WhatsApp, which it estimates is generating an approximately $9 billion revenue run rate today, could scale to $36 billion by FY29, while Threads’ roughly 500 million users provide early monetization potential.

Jefferies adds that Llama and Meta’s broader AI offerings could eventually introduce paid features.

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