Meta’s AI-Driven Spending Sparks Stock Plunge, But Institutional Investors See Value
Meta Platforms Inc. shares have tumbled 25% from their peak following the company's ambitious AI infrastructure spending plans. Despite the market's negative reaction, the tech giant's fundamentals remain robust—Q3 revenue surged 26% year-over-year to $51.2 billion, exceeding analyst expectations.
The selloff comes as Meta projects capital expenditures will balloon to over $100 billion by 2026, up from $39.2 billion in 2024. Yet these investments are already yielding results: AI-powered recommendations boosted Facebook engagement by 5% and Threads usage by 10%, directly enhancing advertising performance.
At a price-to-earnings ratio of 20—its lowest in years—Meta's valuation appears compelling. ARK Invest's recent $21.4 million purchase of 33,837 shares signals institutional confidence in the long-term payoff of Meta's AI strategy.
