While the tech sector as a whole has been on a tear, Meta Platforms (NASDAQ: META) hasn't followed suit. The leading social media stock is down 21% from its all-time high of $796 last August (as of May 29).
The main reason behind the slump is artificial intelligence (AI) spending. Meta's last three quarters have followed the same pattern: management raises capital expenditure (capex) guidance, investors get worried, and the share price drops. Most recently, Meta announced plans of $125 billion to $145 billion in capex in 2026, up $10 billion from previous guidance.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Critics have compared these spending plans to Meta's big bet on the metaverse, which ended up being a high-profile failure. But there's a lot that this comparison misses.
The key difference between Meta's AI and metaverse spending is that AI generates measurable returns. Meta's AI-powered recommendation algorithms have helped drive improved engagement metrics and ad revenue. The social media company's Advantage+ suite of tools allows businesses to optimize and automate campaigns and offers generative AI tools for faster ad creation and a continuous stream of fresh content.
The main reason behind the slump is artificial intelligence (AI) spending. Meta's last three quarters have followed the same pattern: management raises capital expenditure (capex) guidance, investors get worried, and the share price drops. Most recently, Meta announced plans of $125 billion to $145 billion in capex in 2026, up $10 billion from previous guidance.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Critics have compared these spending plans to Meta's big bet on the metaverse, which ended up being a high-profile failure. But there's a lot that this comparison misses.
The key difference between Meta's AI and metaverse spending is that AI generates measurable returns. Meta's AI-powered recommendation algorithms have helped drive improved engagement metrics and ad revenue. The social media company's Advantage+ suite of tools allows businesses to optimize and automate campaigns and offers generative AI tools for faster ad creation and a continuous stream of fresh content.
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