Meta Platforms Inc: AI Outlook Flips as Muse Spark 1.1 Model Advances, with Signs of External AI Monetization & AI Product Cycle; Incrementally Positive, But Remain Neutral

Research evidence excerpt

Meta Platforms Inc: AI Outlook Flips as Muse Spark 1.1 Model Advances, with Signs of External AI Monetization & AI Product Cycle; Incrementally Positive, But Remain Neutral

J P M O R G A N North America Equity Research

12 July 2026

Meta Platforms Inc

AI Outlook Flips as Muse Spark 1.1 Model Advances, Neutral

with Signs of External AI Monetization & AI Product META, META US

Cycle; Incrementally Positive, But Remain Neutral Price (10 Jul 26):$669.21

Price Target (Dec-26):$725.00

Meta shares have traded up +23% off late June lows (vs. SPX +3%) driven by Internet - Large Cap / Mid & Small

improved sentiment around META’s AI strategy, the launch of external AI Cap

monetization, & signs of an AI product cycle. Muse Spark 1.1 comes with Doug Anmuth AC

significant improvements across agentic & coding roughly a year after Meta’s AI (1-212) 622-6571

retrenchment via MSL. Continued model progression may push Meta closer to the douglas.anmuth@jpmorgan.com

frontier of personal superintelligence, tighten the competitive gap with Anthropic, Bryan M. Smilek

OpenAI, & Google, & signal that Meta could start building more compelling AI (1-212) 622-8886

products. Meta’s Model API in public preview represents Meta’s first form of bryan.smilek@jpmorgan.com

external AI monetization, and lower relative API pricing (~25% the cost vs. Margaret Hoffman

(1-212) 622-1710

leading AI models) should enable Meta to accelerate enterprise monetization at margaret.hoffman@jpmchase.com

attractive steady-state operating margins. Reuters reported that Meta plans to reach J.P. Morgan Securities LLC

7GW of compute in 2026 & double capacity to 14GW in 2027. We expect Meta

to continue to work towards core AI products that can be leveraged across its