Redburn Atlantic upgraded Meta to Buy, lifting its price target to $900 from $740. The brokerage argues investor anxiety over mounting AI costs has unfairly overshadowed the company’s long-term earnings potential. Shares saw modest premarket gains ahead of Wednesday’s earnings report.

Meta’s recent share price weakness stems from uncertainty around heavy spending, particularly its Superintelligence Labs initiative. Redburn raised its FY26 cost estimate to $158.6 billion, above consensus, which could pressure near-term EPS. Still, the firm expects Meta to reclaim a leadership position in AI model development this year.

The upgrade hinges on two longer-term bets: using agentic AI to expand its Advantage+ platform for small businesses, and leveraging AI-driven video generation to reshape entertainment. Redburn believes Meta’s return on invested capital will stay above 20% through 2028, making the current stock price a bargain.