META: Why The Market's Reaction Is Justified This Time Around (Rating Downgrade)

Meta Platforms is downgraded from BUY to HOLD, with a base case price target of $631, reflecting a modest 6.6% upside. META's recent underperformance stems from its failure to provide concrete demand signals alongside increased capex, unlike hyperscaler peers. Despite leading revenue growth at 28% y/y, META's profitability declined due to surging R&D expenses and decelerating ad metrics.