Meta Platforms (META) is benefiting from a macro and digital advertising environment that is "better than feared" compared with six weeks ago, Oppenheimer said.

In a note Sunday, the firm said it raised its 2025 and 2026 revenue estimates by 4% and 1%, respectively.

Oppenheimer also increased its Q2, Q3, and Q4 revenue forecasts by 4%, 9%, and 3%, respectively, with EPS estimates up 8%, 20%, and 5%, as the threat of a tariff-induced recession appears to have faded.

While the firm sees near-term risk from TikTok's Q1 performance assuming no US ban, it also flagged a longer-term concern that Meta could be falling behind on AI development.

The brokerage pointed to perceived underperformance of Llama 4 and delays in the launch of its next-gen "Behemoth" model. In response, Meta recently made a $14.3 billion investment in Scale AI for a 49% stake, a move seen as both a strategic partnership and a way to accelerate its AI development.

The firm now expects 2025 and 2026 capex to rise to $68 billion and $85 billion, respectively, and raised its EPS forecasts to $25.41 and $28.23, up 6% and 11% year over year.

Oppenheimer raised its price target on the company to $775 from $665 and maintained its outperform rating.

Price: 706.00, Change: +23.66, Percent Change: +3.47