Citigroup Identifies AI Stocks Priced Reasonably
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 04 2025
0mins
Source: CNBC
Investment Strategy: Citigroup analysts recommend exploring lesser-known stocks that capitalize on the AI boom while offering growth at a reasonable price (GARP), amidst concerns of an AI investment bubble affecting tech sector performance.
Stock Selection Focus: Emphasis is placed on selecting companies with strong cash returns on growth capital expenditures, while avoiding those unable to self-fund, as the tech-heavy Nasdaq has underperformed compared to the S&P 500.
Diverse Stock Recommendations: Citigroup has compiled a list of stocks across various industries, including Adobe, Nvidia, and Eaton, which are seen as having reasonable valuations and strong future earnings potential, despite some red flags regarding inflated growth expectations.
Market Outlook: Analysts caution that earnings disappointments could lead to market corrections, highlighting the importance of focusing on GARP strategies within AI to build a resilient investment portfolio.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for META is 824.71 USD with a low forecast of 655.15 USD and a high forecast of 1117 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 668.730
Low
655.15
Averages
824.71
High
1117
Current: 668.730
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Meta's Earnings Beat Expectations, Analysts Raise Price Targets
- Strong Earnings: Meta reported fourth-quarter earnings of $8.88 per share and revenue of $59.89 billion, both exceeding market expectations, indicating that AI-driven advertising monetization is alleviating concerns over rising operating and capital expenditures.
- Robust Guidance: The company expects first-quarter sales to range between $53.5 billion and $56.5 billion, significantly above the consensus estimate of $51.41 billion, suggesting strong growth momentum in its advertising business that reinforces its market position.
- AI Investment Returns: Despite a $6.02 billion operating loss from Reality Labs, analysts remain optimistic about Meta's AI investments, believing that the growth in its advertising business will offset these losses, with benefits from AI expected to materialize by 2026.
- Analyst Optimism: Several Wall Street analysts raised their price targets for Meta, with Barclays increasing its target to $800, implying a 20% upside, reflecting confidence in Meta's long-term growth potential.
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TSMC Reports Stellar Q4 Results and Capital Spending Plans
- Significant Revenue Growth: TSMC's Q4 revenue surged 25.5% year-over-year to $33.73 billion, with a gross margin of 62.3%, reflecting strong market demand and profitability, thereby reinforcing its leadership position in the semiconductor industry.
- Capital Expenditure Plans: Management anticipates capital spending between $52 billion and $56 billion in 2026, with approximately 40% of revenue allocated to capital expenditures, indicating strong confidence in future growth and ongoing investment in the AI market.
- Increase in Advanced Process Share: Three-nanometer chips accounted for 28% of total wafer revenue, five-nanometer for 35%, and seven-nanometer for 14%, totaling 77% of revenue from the most advanced processes, highlighting the robust demand driven by AI applications and TSMC's technological edge.
- Geopolitical Risk Management: TSMC is actively expanding into the U.S. and Japan to reduce reliance on Taiwan, enhancing the stability and resilience of its global supply chain, ensuring competitiveness in a rapidly changing market environment.
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