Meta Platforms (NASDAQ: META) could generate more than $26 billion in additional revenue by 2027 from new AI products, subscriptions, and advertising initiatives, according to a report from Wolfe Research.
Wolfe noted that investor concerns about Meta Platforms' high capital expenditures, negative free cash flow, and uncertainty about returns from its AI investments have weighed on market sentiment.
The company predicted that Meta Platforms' revenue growth in 2027 would reach 22%, exceeding Wall Street's expectations of 19%.
The report estimates that Meta Platforms could generate more than $6 billion in additional non-advertising revenue by 2027, driven by Business AI, subscriptions, and agent commerce initiatives.
Business AI alone could contribute around $5 billion, fueled by the growing adoption of business messaging services in markets including India, Indonesia, Brazil and Mexico.
Instagram-linked subscription products and Meta AI could add around $1 billion, while proxy commerce initiatives could contribute more than $300 million.
As for advertising, Wolfe believes there are additional revenue opportunities exceeding $20 billion by 2027.
The company expects that Meta Platforms' AI-powered advertising systems, including Muse Spark, Andromeda, GEM, and Latice, will contribute more than $10 billion in additional revenue by improving ad targeting and conversion rates.
The report also forecasts that Threads' advertising revenue will reach approximately $4 billion in 2027, up from an estimated $2.30 billion in 2026.
WhatsApp ads could contribute around $2 billion, while Click-to-Message advertising revenue is expected to reach around $26 billion, an increase of around $4 billion compared to 2026 levels.
Wolfe also raised its capital expenditure forecast for MetaPlatforms, expecting spending of around $200 billion in 2027, compared with the Wall Street consensus estimate of around $158 billion.
The company's forecast includes approximately $120 billion in spending related to graphics processing units (GPUs) and central processing units (CPUs), along with investments in network infrastructure, power, and data centers.
The report estimates that MetaPlatforms' computing power will double to around 15 gigawatts in 2027, up from around 10 gigawatts in 2026, as the company expands its infrastructure to support its growing artificial intelligence ambitions.
