Meta ‘s third-quarter results have Wall Street analysts split on the struggling tech stock. Shares of Meta plunged more than 20% in Thursday premarket trading after the social media company reported an earnings miss, and issued a weaker-than-expected forecast for the fourth quarter. The tech stock is already down more than 60% year to date as the company deals with a raft of issues. A broader pullback in online ad spending amid recession concerns, as well as updates to Apple’s privacy policy, and greater competition from TikTok have weighed on the stock. Now, some analysts are concerned that higher spending from Meta as it builds up its AI capabilities could hurt the stock in 2023, while others maintain that the stock’s plunge this year presents investors with a buying opportunity. Morgan Stanley’s Brian Nowak downgraded shares of Meta to equal weight from overweight after the results , and slashed its price target to $105 from $205. “We see META’s $69bn of capex over 2 years and AI-driven data center build as a sign of structurally higher capital intensity,” Morgan Stanley’s Brian Nowak wrote in a Thursday note. “While these investments could make META stronger over 5 years, we see ’23 FCF heading 60% lower and higher risk to prove ROIC and incremental growth.” Others also downgraded the stock because of higher-than-expected expenditures in 2023. Cowen’s John Blackledge downgraded Meta to market perform from outperform, and lowered his price target to $135 from $205 prior, citing the higher opex and capex trajectory. KeyBanc’s Justin Patterson lowered his rating on the stock to sector weight from overweight, also citing the rising costs. Meanwhile, Bank of America’s Justin Post reiterated a neutral rating on the stock, while slightly lowering his price target to $136 from $150, saying the results were a mixed bag. “The stock was down ~20% AH, driven by slightly lower revenues, and much higher Opex and Capex that will weigh on 2023 EPS and FCF,” Post wrote in a Wednesday note. “Clearly the street didn’t think the company would take investments this far while revenues were under pressure, but there were some underlying positives, including traction for much-anticipated messaging monetization.” JPMorgan’s Doug Anmuth slashed his Meta price target to $115 per share from $180, noting that it’s unclear when the Facebook parent will see a return on its big metaverse and AI investments. On top of that, “we believe the set of revenue drivers into 2023 is less impactful than in previous years, and faces macro headwinds.” ‘Dirt-cheap valuation’? Elsewhere, Goldman Sachs’ Eric Sheridan reiterated a buy rating on Meta, while lowering the price target to $165 from $200, saying he remains focused on Meta’s “large scaled audience” across its social media platforms, in spite of the expected rise in spending. “Taking a step back from the recent stock performance (both YTD and in the after-market), we see platform/infrastructure investments by Meta (which started in mid-2020) as both a) continuing to build independence from a volatile range of outcomes from future mobile OS platform changes; and b) aligned with a strategic shift toward short-form video and from the social graph to the interest graph,” Sheridan wrote in a Thursday note. Meanwhile, AllianceBernstein’s Mark Shmulik, who maintained an outperform rating while lowering the price target to $135 from $195, said the “shocking cost guidance overshadows reasonable core.” He advised investors to “put emotions to the side and conservative 2024 estimates offer a dirt-cheap valuation to plug-your-nose-and-buy.” —CNBC’s Michael Bloom contributed to this report.