Truist analysts led by Youssef Squali have issued a bullish note on Meta Platforms (NASDAQ: META), arguing the social media giant is laying the groundwork for a new $20 billion subscription-based revenue stream. The firm maintains a “buy” rating on the stock with a price target of $840, implying more than 40% upside from current levels.
“We remain constructive on META as the company continues to outgrow the digital ad market while also diversifying into new revenue streams, including subscriptions,” Squali wrote. The analyst sees Meta’s consumer-focused subscription tiers and AI plans as a highly profitable sales base over the coming decade.
Meta shares are down roughly 10% year-to-date, but Truist believes the company’s deliberate shift toward a “dual-revenue” model—combining advertising with recurring subscription income—is a key catalyst. Squali draws a parallel to Google’s successful expansion into subscription services via YouTube and Google One, which generated over $35 billion last year.
Meta is rolling out “Plus” tiers across Facebook, Instagram, and WhatsApp, offering enhanced personalization, engagement, and audience control features. On top of that, the company is introducing paid AI offerings. Truist estimates these new services could boost Meta’s subscriber count by more than 360 million and become a high-margin $20 billion business within the next five years.
Squali expects these subscription revenues to eventually represent up to 5% of Meta’s overall top line. Instagram Plus is projected to anchor this growth, yielding an estimated $10 billion annually by the end of the decade. Meta AI could follow at about $6.5 billion, while Facebook Plus and WhatsApp Plus are forecast at nearly $2.8 billion and $2 billion, respectively.
Meta is using an accessible pricing matrix: social platform tiers range from $2.99 to $3.99 per month, while premium AI-focused plans are priced between $7.99 and $19.99. The company’s ability to command premium pricing is rooted in recent technological advances, particularly its multimodal reasoning model, Muse Spark, which enabled the launch of top-tier subscriptions like Meta OnePlus and Meta One Premium. These offer advanced image and video generation, unlimited voice conversations, and a dedicated “Thinking Mode.”
Crucially, Truist’s long-term subscription thesis extends beyond software. Squali expects Meta to eventually bundle recurring services with its hardware portfolio, especially monetizing Meta glasses through added functionalities like expanded cloud storage and extended recording capabilities. A small 0.36% dividend yield also adds to the stock’s appeal, he noted.
For context, other tech giants are also pursuing subscription-driven growth. DraftKings Stock Surges 11% as Prediction Market Volume Hits $3.1 Billion highlights how digital platforms are diversifying revenue streams. Meanwhile, Corning Jumps 8% on Amazon's Multi-Billion Fiber Optic Deal for AI Data Centers underscores the infrastructure buildout supporting AI services like Meta’s.
As Meta pivots toward subscriptions, investors will watch how these new offerings scale. Options Market Signals 10% Upside for Oracle Stock Ahead of Q4 Earnings shows that market sentiment can shift quickly on earnings catalysts, and Meta’s upcoming reports will be key to validating Truist’s thesis.
This article is for informational purposes only and does not constitute financial advice.
