By Emily Bary
The Facebook parent company headlines Rosenblatt's list of top first-half stock picks, but Applied Optoelectronics and Magnite shares also make the cut with major upside projected
A more disciplined approach to spending could help Meta's stock early next year, according to Rosenblatt Securities.
After two blowout years, Meta's stock performance has been more subdued in 2025. But Rosenblatt Securities analyst Barton Crockett sees various reasons the stock can get back to its extremely winning ways in 2026.
He named Meta's stock (META) a top pick for the first half of the year, following a 12% year-to-date climb in 2025 that trails the S&amp;P 500's SPX 15% rise over the same span.
One big thing that could power Meta's stock would be a more disciplined approach to spending. Crockett noted that &#34;investor sentiment toward Meta has historically swung substantially on [Mark] Zuckerberg's spending tone,&#34; and flagged that Meta shares went on to rise nearly 200% in 2023 after the Meta CEO declared it to be a year of &#34;efficiency.&#34;
There are signs Meta could be inching in that direction again. Bloomberg News reported earlier this month that Meta was planning to slash the budget for its &#34;metaverse&#34; initiatives, which include virtual- and augmented-reality efforts.
Investors have become more concerned about Meta's spending in general. While the metaverse is just one piece of the overall spending puzzle, it's an area of the business that has been especially money-losing, and one that Wall Street largely deems to have a questionable financial payoff.
Don't miss: Big Tech stocks are getting cheaper, and that could mean gains of up to 60%
A 30% cut to Reality Labs costs, as Bloomberg reported was up for consideration, could boost operating profit by 7% and adjusted earnings per share by 9%, according to Crockett.
Meta didn't immediately respond to MarketWatch's request for comment on the report.
Crockett isn't so sour on Meta's broader AI-spending plans, noting that in his view, it's &#34;unusually clear&#34; that the Facebook parent company is generating returns in areas like engagement.
&#34;Meta CEO Mark Zuckerberg may be losing some investors with hisbroad-stroke talk of creating personal AI,&#34; he wrote. &#34;But it is possible there's something in this, meaning it's a call option, at a minimum.&#34;
Crockett's $1,117 Meta price target is about 70% above current levels.
See also: Why Meta's stock may be ready to rally 70%, despite Zuckerberg's massive AI-spending plans
His other top pick is Magnite (MGNI), an advertising-technology company. Shares could rise more than 130% if they were to hit his $39 price target.
Crockett thinks investors are ignoring the company's &#34;transformative potential&#34; to win market share from Alphabet's (GOOG) (GOOGL) Google in supply-side-platform technology, which lets publishers sell ad space programmatically. &#34;Google was found to illegally monopolize the market,&#34; Crockett noted, so forthcoming remedies from a judge could prove positive for Magnite's own efforts to compete.
Other top first-half picks from the Rosenblatt team include Applied Optoelectronics (AAOI), GitLab (GTLB), Harmonic (HLIT), OneStream (OS), Synaptics (SYNA), TeraWulf (WULF) and Zoom Communications (ZM).
Applied Optoelectronics &#34;should be a top performing stock&#34; in the next year, given its role in making connectivity products that can be used in data centers, according to analyst Mike Genovese. The company &#34;is just starting to participate in the revenue growth and margin accretion&#34; seen by bigger rivals like Coherent (COHR) and Lumentum (LITE), he noted.
The stock could climb about 80% to hit Rosenblatt's $50 target.
See also: 10 stocks that let you invest like Nvidia in the next hot AI trade
GitLab is another favored AI play, which analyst Blair Abernethy thinks will benefit from rising interest in coding assistants.
&#34;We believe that it will become increasingly clear...that the proliferation of AI coding tools will be tailwind for Gitlab's leading software-development platform as new AI tools drive down the cost of coding and speed up the rate of deployment of new features and programs,&#34; he wrote.
Analyst Steve Frankel likes Harmonic, which makes broadband-access technology that it sells to the likes of Comcast (CMCSA) and Charter Communications (CHTR). Though the company experienced some challenges in the past year related to customer deployments, &#34;it is clear that Comcast is back on track and that Charter has begun to ramp deployments,&#34; he wrote.
&#34;Harmonic is ending 2025 on a high note which sets the stage for an acceleration in growth paired with margin expansion,&#34; Frankel said.
Analyst Robert Simmons chose OneStream, a maker of software products for finance teams. Shares have lost 34% over the past year. To Simmons, that means opportunity.
&#34;The stock is trading near its lows, for a high-quality grower that's taking share, becoming more predictable and growing margins,&#34; he wrote.
Another preferred pick from the Rosenblatt team is Synaptics, which makes technology that can prove useful as AI moves to the &#34;edge,&#34; or onto consumer devices.
Analyst Kevin Cassidy said he expects Synaptics to announce more design wins for its Astra edge AI processors that could find their way into more wearables.
Meanwhile, TeraWulf has pivoted from being a bitcoin miner into being a provider of compute capacity for AI players. &#34;Although the sector has pulled back due to fears over an overly leveraged AI bubble, we view [TeraWulf] as well positioned to outperform given lower execution risk (test site already powered up on schedule) and reduced funding risk,&#34; Rosenblatt's Chris Brendler wrote.
And &#34;Zoom's pivot to an AI-powered work platform is validated by tangible results,&#34; wrote analyst Catharine Trebnick, who sees about 30% upside for the stock.
More from MarketWatch: 16 software stocks for investors sifting through the bargain bin
-Emily Bary
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
12-17-25 1237ET

Meta's stock could soar in the next 6 months, along with these under-the-radar picks