Citi Upgrades Meta Platforms to Buy, Highlights $10B+ Cost Savings from Restructuring

Citi has reaffirmed its Buy rating on Meta Platforms Inc. (META), highlighting the company’s ongoing cost optimization efforts as a catalyst for stronger financial performance. The firm estimates that Meta’s recent workforce and operational restructuring could deliver annualized savings of over $10 billion, a significant shift in operational efficiency. These savings are expected to accrue primarily from reduced headcount, streamlined infrastructure, and tighter capital allocation across business units. The restructuring, initiated in late 2024 and accelerated through Q1 2025, has led to a 12% reduction in global headcount, according to internal company disclosures. Citi notes that these changes have already contributed to a 15% improvement in operating margin for the core social media segment, which now accounts for 68% of total revenue. The firm projects that continued discipline in spending will allow Meta to reinvest in AI infrastructure, content moderation, and next-generation platforms like Horizon Worlds without compromising profitability. Meta’s Q3 2025 results showed revenue of $38.7 billion, up 4.5% year-over-year, with non-GAAP net income rising 22% to $14.3 billion. Citi attributes the outperformance partly to cost controls and a 9% increase in ad revenue from Instagram and Facebook, despite macroeconomic headwinds. The firm also sees potential upside from Meta’s AI-driven ad targeting and generative AI tools, which are now integrated into 70% of ad campaigns. The upgrade has influenced investor sentiment, with META shares gaining 6.3% in early trading following the report. Analysts note that the stock’s price-to-earnings ratio of 28x remains modest relative to its growth trajectory and cash flow generation. Institutions have increased their holdings by 1.2% over the past quarter, according to public filings.