Track market-moving stories before they get noisy

Item 1 of 3 A 3D-printed Meta logo and word "AI" are seen in this illustration created on July 20, 2026. REUTERS/Dado Ruvic/Illustration/File Photo

[1/3]A 3D-printed Meta logo and word "AI" are seen in this illustration created on July 20, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab

SummaryCompaniesCase against Meta is first to target AI use in layoffsWorkers grappling with lack of evidence, arbitration pactsObstacles help explain dearth of AI-related lawsuits by workersJuly 22 (Reuters) - A novel lawsuit claiming that Meta Platforms (META.O), opens new tab relied on discriminatory AI tools to select employees for layoffs highlights the problems workers face in suing employers over the new technology, including proving how it was actually used.

The case helps ​illustrate why a widely predicted wave of employment lawsuits over AI use has yet to arrive. Legal experts say workers often have little understanding of how AI systems ‌are used in the workplace and many have also signed away their right to sue in court, agreeing instead to resolve workplace disputes through a private process called arbitration that can keep such claims from ever being tested publicly.

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In a ruling last week declining to block Meta from finalizing the terminations of 26 people who sued, U.S. District Judge William Orrick identified a fundamental obstacle for plaintiffs who allege that AI discriminated against them: "they were not in the rooms where it happened."

That ​means workers like the Meta employees, who claim they were targeted for layoffs because they have disabilities or took medical or family leave, often cannot muster the evidence of wrongdoing necessary to ​quickly secure a win in court.

And they face another obstacle: Like a majority of U.S. workers, the plaintiffs are bound by an arbitration agreement, meaning they ⁠cannot band together in a class action, put their case before a jury, or push for a multimillion-dollar settlement in open court.

ARBITRATION AGREEMENTS BLOCK LAWSUITSCompanies generally prefer arbitration, which they say is a faster, ​cheaper alternative to court, while worker advocates say it often favors employers and discourages workers from bringing claims. The arbitration process is also confidential, so it can shield unfavorable evidence unearthed in an individual case ​from wider disclosure.

"Even if you establish that a particular system would produce discriminatory outcomes left and right, you have no way of sharing that information with other employees," said Christine Webber, co-chair of the civil rights and employment practice at plaintiffs' firm Cohen Milstein Sellers & Toll. Webber's firm is not involved in the Meta case.

Webber and other plaintiffs' lawyers said those hurdles explain the lack of high-profile court cases involving employers' use of AI even as it becomes routine, ​and why even the lawsuit against Meta seeking only temporary relief is unusual.

One of the few cases to emerge over companies' workplace use of AI tools involves Workday (WDAY.O), opens new tab, which is facing claims that its ​popular HR management software unlawfully filtered out applicants for jobs at other companies based on race, age and disability. Arbitration is not an issue in that case because Workday does not have agreements with its customers' job applicants. Workday ‌denies the allegations.

PLAINTIFFS ⁠SEEK INJUNCTIONThe agreements signed by the Meta workers contain a common, narrow exception for seeking a court order that temporarily blocks one side from taking some irreversible action. But that exception is typically invoked in cases involving the alleged theft of trade secrets or the solicitation of clients or employees, and not layoffs of at-will workers.

Orrick denied the plaintiffs a temporary restraining order that would have stopped Meta from completing the layoffs. He must still decide whether to issue a preliminary injunction, a temporary but longer-lasting order that would put the workers back in their jobs until their individual arbitration cases are resolved. He said ​he could change his mind and grant the injunction ​if the plaintiffs come up with evidence "regarding ⁠whether and how AI was used in an improper manner."

A hearing is scheduled for August 24, and the losing side can appeal Orrick's decision.

The plaintiffs claim that in selecting jobs to cut, Meta consulted AI tools that tracked productivity and AI token usage (a measure of how much workers use AI tools), disadvantaging ​people who missed work because of medical conditions or to care for family members.

They allege that Meta used a number of internal AI-assisted systems including ​a large language model ⁠assistant known as "Metamate," an employee-trained "second brain" that tracked workers' communications and documents, and a productivity score drawn from scanning keystrokes, screen content, emails and browser history, according to the lawsuit.

Meta said in court filings and statements last week in response to the lawsuit that humans made all of the decisions concerning nearly 8,000 layoffs announced earlier this year and has denied treating AI usage as a basis for identifying workers to terminate or to conduct ⁠performance reviews. A ​Meta spokesman said on Tuesday that the company had no further comment.

Orrick said in his decision that he was bound ​to take Meta at its word since the plaintiffs could not present any evidence to rebut those claims.

The plaintiffs' lawyers in a joint statement last week acknowledged the hurdles they face in gathering evidence, even calling on current and former Meta employees to ​contact them with knowledge of how AI was used in the selection process.

"Meta holds virtually all the relevant information," they said.

Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at [email protected].

Meta Platforms (META 0.30%) has caused some angst for neocloud stockholders. The company allegedly plans to launch its own cloud business to lease access to AI computing power and AI models, and given the scale of the data centers it's constructing, it could become a serious competitor in the space.

Those concerns intensified after reports emerged that Meta Platforms and Anthropic are discussing a compute deal for up to $10 billion that would run over 2 years. No official announcements have been made, so there are no details yet about how many gigawatts such a deal could involve.

Neither company has confirmed the talks, which were described as early-stage conversations by the unnamed source. However, it appears that Meta Platforms is serious about entering the cloud infrastructure industry, and its entry could affect key players.

Image source: Getty Images.

Can Meta Platforms turn from the biggest customer to the biggest seller While Meta Platforms is building a 5-gigawatt data center in Louisiana and gobbling up as much computing hardware as possible, AI demands present a challenge for the company. Many investors are wondering how it will be able to reliably sell computing power when it is buying compute heavily from other companies for its own needs.

For instance, Meta Platforms recently signed a five-year, $27 billion deal with Nebius (NBIS +18.91%) for additional compute.

However, Meta Platforms might have plenty of compute available within the next few years. In January, Mark Zuckerberg shared in a Threads post that he expects the company to build tens of gigawatts of AI infrastructure this decade, and "hundreds of gigawatts or more over time."

Meta Platforms still needs compute for its social networks, large language models (LLMs), and AI glasses. Since the company closed Q1 with 3.56 billion daily active users across its social networks, it has greater compute needs than almost any other company.

It's a long-term risk that may arrive too late to matter Meta Platforms has used the copycat model to take out rival platforms like Vine and limit Snapchat's growth prospects, but it likely won't play out that way with the neoclouds. The AI industry is moving too quickly, and Meta Platforms' own compute needs will continue to grow. By the time it gets its cloud leasing business off the ground at meaningful scale, the winners of the industry may have already been decided.

Hut 8 (HUT +7.89%) recently announced that it had expanded an existing contract with a "high-investment-grade tenant." The updated lease has a 15-year term covering 352 megawatts. The contract's total value is $9.8 billion, averaging $653 million per year. The company's 1-gigawatt Beacon Point AI data center is poised to produce more than $1.75 billion in net operating income from its contracts.

Meta Platforms is one of several companies that fit the "high-investment-grade tenant" description. If it was Meta Platforms expanding its contract, that would be a clear signal that the social media company still needs a lot more compute than it has online, in which case it won't be in a good position to sell capacity for a while. However, if the unnamed tenant wasn't Meta Platforms, the deal still highlights something investors should pay attention to: Companies that need AI compute aren't waiting around for Meta to figure out its cloud segment.

Diversification may become more important Meta Platforms is a hyperscaler already, and if it has enough excess compute that it can start selling some of it, it theoretically won't have to buy compute from competitors. Granted, Meta Platforms would actually have to build tens of gigawatts' worth of AI data centers this decade, but investors should consider what would happen if this scenario is realized.

The extremely pessimistic take for the neoclouds is that Meta Platforms and other hyperscalers will build enough of their own data centers to fully meet their needs, after which they will not need neoclouds like Nebius or CoreWeave. Those companies have lucrative contracts with the giants right now, but they may be renegotiated to less profitable rates or simply not renewed at all if hyperscalers have sufficient capacity within their own AI data centers.

Compute seller Iren (IREN +2.64%) has demonstrated that it can diversify its customer base beyond the hyperscalers. The company announced this week that it had secured $2.8 billion in new customer contracts with "leading AI developers." The number of megawatts was not specified, but the average contract length is four years.

The company now has 10 customers, including "a new leading AI developer," the name of which it may reveal in its upcoming earnings report. Iren also raised its 2026 annual recurring revenue target to over $4 billion, indicating that demand is not slowing.

Even if hyperscalers were to wind down their usage of neocloud providers, that might not be a problem for them. Neoclouds like Nebius could ink agreements to sell their critical IT load to new customers one to two years in advance, getting those commitments on the books ahead of the expirations of their current contracts. AI developers and hyperscalers have already demonstrated they are willing to wait that long for power.

With that in mind, investors shouldn't be worried about the latest headlines around Meta Platforms. If the neoclouds need to look elsewhere for customers, they should have little trouble finding them.

Posted by Defense World Staff on Jul 22nd, 2026

C WorldWide Group Holding A S trimmed its holdings in Meta Platforms, Inc. (NASDAQ:META – Free Report) by 16.4% in the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The fund owned 32,045 shares of the social networking company’s stock after selling 6,299 shares during the quarter. C WorldWide Group Holding A S’s holdings in Meta Platforms were worth $18,334,000 as of its most recent filing with the Securities and Exchange Commission.

Several other large investors have also modified their holdings of META. RHL Group LLC acquired a new position in shares of Meta Platforms in the 4th quarter valued at $28,000. Strategic Wealth Advisors LLC purchased a new position in Meta Platforms during the fourth quarter valued at approximately $29,000. Niles Investment Management LLC purchased a new position in shares of Meta Platforms during the 4th quarter valued at $29,000. Bayban grew its stake in Meta Platforms by 100.0% in the first quarter. Bayban now owns 70 shares of the social networking company’s stock valued at $40,000 after purchasing an additional 35 shares in the last quarter. Finally, Safe Harbor Fiduciary LLC acquired a new position in Meta Platforms in the fourth quarter worth approximately $42,000. 79.91% of the stock is owned by institutional investors.

Key Meta Platforms News Here are the key news stories impacting Meta Platforms this week:

Positive Sentiment: Wells Fargo raised its price target on Meta and kept an overweight rating, signaling expectations for meaningful upside from current levels. Benzinga report on Wells Fargo target hike Positive Sentiment: Rothschild & Co Redburn also boosted its target and reiterated a buy rating, reflecting growing optimism that Meta can monetize AI more effectively. Benzinga report on Rothschild & Co Redburn target hike Positive Sentiment: Multiple reports highlighted Meta’s expanding AI strategy, including possible cloud/compute sales and large enterprise deals, which could create a new revenue stream and support margins over time. Positive Sentiment: Bank of America said Meta is positioned to beat second-quarter expectations, citing healthy ad demand and AI-driven improvements ahead of earnings later this month. Positive Sentiment: Wall Street commentary continues to frame Meta as a key beneficiary of the AI spending boom, with investors watching whether infrastructure investment can be monetized faster than expected. Neutral Sentiment: A comparison piece versus Pinterest and a broader “Mag 7” article mainly added background, but did not change the core investment thesis for META. Negative Sentiment: Meta is facing a Tennessee trial over claims that Instagram was designed to be addictive and contributed to youth mental-health issues, adding legal and regulatory risk. Negative Sentiment: A New York Times report said Meta’s AI moderation mistakenly banned user accounts, raising questions about product reliability and trust in its automated systems. Negative Sentiment: Ongoing investor concerns remain around heavy AI spending, data-center financing, and whether returns on that capital will justify the expense. Insider Buying and Selling In other Meta Platforms news, CFO Susan J. Li sold 9,195 shares of the firm’s stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $607.84, for a total transaction of $5,589,088.80. Following the transaction, the chief financial officer owned 13,186 shares in the company, valued at approximately $8,014,978.24. This trade represents a 41.08% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Curtis J. Mahoney sold 2,079 shares of the business’s stock in a transaction that occurred on Wednesday, May 27th. The shares were sold at an average price of $609.92, for a total transaction of $1,268,023.68. Following the transaction, the insider owned 1,118 shares of the company’s stock, valued at approximately $681,890.56. This represents a 65.03% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 37,948 shares of company stock worth $23,184,319. Corporate insiders own 13.53% of the company’s stock.

Wall Street Analyst Weigh In Several equities analysts have commented on META shares. Susquehanna raised shares of Meta Platforms from a “positive” rating to a “positive” rating in a research report on Tuesday, June 2nd. Truist Financial dropped their target price on shares of Meta Platforms from $900.00 to $840.00 and set a “buy” rating on the stock in a research report on Thursday, April 30th. Weiss Ratings lowered Meta Platforms from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Friday, June 26th. Citizens Jmp dropped their price objective on shares of Meta Platforms from $825.00 to $800.00 and set an “outperform” rating for the company in a research note on Friday, July 10th. Finally, Stifel Nicolaus dropped their target price on Meta Platforms from $805.00 to $780.00 and set a “buy” rating for the company in a report on Friday, May 1st. Five equities research analysts have rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, eight have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of $835.64.

Get Our Latest Stock Report on Meta Platforms

Meta Platforms Stock Performance META stock opened at $643.81 on Wednesday. The company has a debt-to-equity ratio of 0.24, a current ratio of 2.35 and a quick ratio of 2.35. Meta Platforms, Inc. has a fifty-two week low of $520.26 and a fifty-two week high of $796.25. The stock has a market capitalization of $1.63 trillion, a PE ratio of 23.40, a price-to-earnings-growth ratio of 1.14 and a beta of 1.25. The company has a 50 day moving average price of $604.93 and a 200 day moving average price of $626.52.

Meta Platforms (NASDAQ:META – Get Free Report) last posted its quarterly earnings results on Wednesday, April 29th. The social networking company reported $10.44 earnings per share (EPS) for the quarter, beating the consensus estimate of $6.67 by $3.77. Meta Platforms had a return on equity of 36.93% and a net margin of 32.84%.The business had revenue of $56.31 billion for the quarter, compared to analysts’ expectations of $55.56 billion. During the same quarter last year, the business earned $6.43 earnings per share. The firm’s quarterly revenue was up 33.1% compared to the same quarter last year. Analysts forecast that Meta Platforms, Inc. will post 29.47 EPS for the current year.

Meta Platforms Announces Dividend The business also recently declared a quarterly dividend, which was paid on Thursday, June 25th. Stockholders of record on Monday, June 15th were paid a $0.525 dividend. The ex-dividend date of this dividend was Monday, June 15th. This represents a $2.10 dividend on an annualized basis and a dividend yield of 0.3%. Meta Platforms’s dividend payout ratio is 7.63%.

About Meta Platforms (Free Report)

Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.

Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.

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Meta is working on an AI storytelling app called StoryKit, which creates AI-generated children’s stories with custom characters, settings, lessons, and music. As the App Store listing assures parents, “You don’t need to write a single word.”

At last, a tech company has found a way to outsource humanity’s oldest pastime: using our imaginations.

StoryKit was first spotted in the App Store by 9to5Mac. Meta confirmed to TechCrunch that the company is piloting StoryKit in select countries to see how parents like it. A Meta spokesperson described StoryKit as a creative storytelling app used to craft personalized, imaginative storybooks for children and noted that it uses AI safety filters with no social features and is only available to users over the age of 18.

To generate a story in the app, you first select a character, which you can create by “[snapping] a photo of their favorite toy or person to bring them to life,” according to the description in the App Store. Then you describe the world of your story and choose a lesson, so that you can “weave in values like kindness, courage, or empathy without it feeling like a lecture.”

Image Credits:StoryKit (opens in a new window) The good news about StoryKit is that it could be a lot worse. Meta regularly ships boneheaded ideas like Instagram deepfake generators and “pervert glasses.” Comparatively, is it so bad to doom children to soulless bedtime stories? Should we have expected anything better from the company that promised us a utopian world of virtual reality work meetings?

Humans have their faults, but if we’re good at anything, it’s making stuff up. We’ve been telling stories for as long as we’ve existed. We don’t even have to spin up original tales of fairy princesses and dragon slayers. We have always drawn from mythology, fables, and other stories — the blockbuster movie of the summer is literally an ancient myth that originated from this same tradition of oral storytelling.

Parents lead exhausting, busy lives, but it has always been possible to survive bedtime without using an inherently uncreative technology that calculates the most predictable response to a prompt.

You could see how it might be tempting to pull up StoryKit when your kid rejects your bookcase full of children’s books and demands that you improvise an intergalactic tale about a turtle and a hedgehog who are best friends and solve space mysteries. But do we really want to reject a chance at whimsy and silliness and instead outsource these moments of connection to reading AI-generated scripts from our smartphones?

Perhaps the moral of the story here is that we can choose not to live in a world where children are raised on bedtime stories written by large language models. Meta’s vision of the future may be antisocial and bleak, but we have the power to reject that reality.

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Amanda Silberling is a senior writer at TechCrunch covering the intersection of technology and culture. She has also written for publications like Polygon, MTV, the Kenyon Review, NPR, and Business Insider. She is the co-host of Wow If True, a podcast about internet culture, with science fiction author Isabel J. Kim. Prior to joining TechCrunch, she worked as a grassroots organizer, museum educator, and film festival coordinator. She holds a B.A. in English from the University of Pennsylvania and served as a Princeton in Asia Fellow in Laos.

You can contact or verify outreach from Amanda by emailing [email protected] or via encrypted message at @amanda.100 on Signal.

It's been a tumultuous year for Meta Platforms (META +0.26%) investors. Despite the company's strong underlying ad revenue and user engagement metrics, the stock has been under meaningful pressure.

While the stock at one point cratered by as much as 20%, shares are now down just 2% year to date -- showing some degree of resilience as capital continues rotating toward companies that are viewed as clearer artificial intelligence (AI) infrastructure winners. With its next earnings reported scheduled for July 29, I predict Meta CEO Mark Zuckerberg will take that opportunity to announce a major strategic shift that could reframe Meta's role in the AI economy. 

Image source: Getty Images.

Meta's AI spending is crushing its free cash flow Meta's stock has been under pressure this year for one reason: the scale of its AI investments. The company is deploying unprecedented sums to build data centers, design custom silicon, and procure GPU clusters to support its AI initiatives.

Those capital expenditures have compressed its free cash flow in the near term. Investors are growing increasingly concerned about the potential timeline for Meta to deliver meaningful returns on this capital, especially amid questions about how AI will be monetized across the broader tech sector.

The result is a disconnect between Meta's operational performance and its stock price, as the market demands more visibility into how these infrastructure investments will ultimately drive sustained profitability rather than just consume it.

META Capital Expenditures (TTM) data by YCharts.

AI is already transformative for Meta Over the last few years, Meta has done a respectable job of embedding AI into its advertising empire. New tools such as Advantage+ use machine learning to automate campaign optimization, audience targeting, and creative testing. This has brought measurable efficiency gains for advertisers while boosting Meta's own average revenue per user. AI-enhanced advertising is becoming an expanding slice of the company's overall business, underscoring Meta's ability to integrate frontier technology directly into its highest-margin segment.

What investors may be overlooking is that this same infrastructure build-out offers the opportunity for a natural business extension: monetizing some of that data center capacity by leasing compute to external clients. Once the heavy up-front investments in power, networking, and accelerators are made, adoption rates carry high incremental margins.

Leasing spare capacity would diversify Meta's revenue away from the cyclical advertising market, providing it with a more predictable, subscription-like income stream. Moreover, it would transform Meta from a solely consumer platform into a more comprehensive infrastructure enabler for enterprises.

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Zuckerberg should announce a capacity deal on the earnings call The most obvious potential catalyst for a sharp rebound in Meta stock could come from what Zuckerberg chooses to reveal on the earnings call later this month. I think he will announce a significant capacity-leasing agreement with a frontier AI lab such as Anthropic or OpenAI.

Such a move would signal Zuckerberg's broader ambition to transform Meta into a true AI ecosystem rather than simply using the technology to make advertising more precise. By offering high-performance compute to a leading model developer, Meta would create new revenue, deepen strategic relationships beyond its suppliers, and generate network effects as more companies onboard to train and deploy on its infrastructure.

Throughout the AI revolution, investors have rewarded companies that took concrete steps toward ecosystem expansion. A credible announcement on the earnings call could easily trigger a rapid rerating of Meta stock as investors revise their view of the company into one that is no longer just defending its advertising moat, but actively building the rails for the AI infrastructure era.

Users said the technology mistakenly deleted their accounts. To resolve the issue, they still had to rely on A.I.

Meta Platforms (NASDAQ:META | META Price Prediction) and Pinterest (NYSE:PINS) both closed Q1 2026 with double-digit revenue growth, yet the businesses behind those beats look nothing alike.

Meta is pouring tens of billions into a superintelligence buildout that already reaches 3.56 billion daily users. Pinterest is a smaller visual discovery platform trying to turn 631 million monthly users into a durable ad engine.

AI Infrastructure Powers One. Visual Search Powers the Other. Meta beat Wall Street with EPS of $10.44 on $56.311 billion in revenue, up 33.08% year over year. Ad impressions climbed 19% while price per ad rose 12%, a rare combo that shows AI-driven targeting is still improving auction dynamics. A $8.03 billion tax benefit tied to U.S. Treasury Notice 2026-7 flattered the headline, so the underlying quarter looks strong but not quite as heroic as the headline suggests.

CEO Mark Zuckerberg framed it as “a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs.” Reality Labs still bleeds cash at a $4.03 billion operating loss, and capex guidance jumped to $125 to $145 billion for the year.

Pinterest posted $1.008 billion in revenue, up 17.84%, its first quarter above the billion-dollar mark. Rest of World revenue exploded 59% year over year, and Europe added 27%.

Bill Ready keeps hammering the same theme: “Pinterest is where online discovery leads to real-world action.” The catch is a GAAP net loss of $73.6 million, driven by $231.45 million in stock-based comp and a $47.1 million restructuring charge.

A Cash Machine Versus a Turnaround Bet Lens Meta Pinterest Core Bet Personal superintelligence at scale Visual search as commerce funnel Operating Margin (TTM) 40.6% -3.3% Forward P/E 21x 13x Key Vulnerability $125B+ capex digestion Retail ad concentration, SBC dilution Meta is spending like a company chasing a decade-defining platform shift, and it can afford to. Return on equity sits at 32.9%.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

Pinterest carries a leaner sheet after loading up on $980 million in convertible notes and completing $1.946 billion in Class A buybacks, which drained cash from $969M to $378 million. That is an aggressive move for a company still running at a GAAP loss.

The Next Twelve Months Will Decide Everything For Meta, the question is whether ad monetization keeps outrunning capex. Polymarket traders assign a 92.5% probability Meta beats Q2, and analysts carry an average target of $822.69 against a recent price of $644.12.

For Pinterest, I want to see ARPU accelerate beyond the current $1.61 and evidence the AI ads platform actually closes the monetization gap versus larger peers.

Why I Lean Toward Meta for the Long Haul If I have to pick one for a multi-year hold, I take Meta. The combination of 40.6% operating margins, a forward P/E near 21x, and a genuine seat at the superintelligence table is difficult to replicate.

Pinterest fits a different investor: someone comfortable with a smaller, noisier turnaround story where shares have already recovered 11.27% since the May 4 earnings report. I would revisit that view if capex creeps above $145B without matching ad growth, or if Pinterest finally translates its 27% European and 59% Rest of World growth into positive GAAP earnings. Until then, the cash machine wins.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

D.A. Davidson & CO. grew its position in shares of Meta Platforms, Inc. (NASDAQ:META – Free Report) by 5.1% in the 1st quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 96,569 shares of the social networking company’s stock after purchasing an additional 4,701 shares during the period. D.A. Davidson & CO.’s holdings in Meta Platforms were worth $55,250,000 at the end of the most recent reporting period.

Other hedge funds and other institutional investors have also recently modified their holdings of the company. First National Bank Sioux Falls lifted its position in Meta Platforms by 0.7% in the 4th quarter. First National Bank Sioux Falls now owns 2,001 shares of the social networking company’s stock worth $1,321,000 after buying an additional 14 shares during the last quarter. Levin Capital Strategies L.P. grew its position in Meta Platforms by 1.4% during the fourth quarter. Levin Capital Strategies L.P. now owns 984 shares of the social networking company’s stock valued at $649,000 after acquiring an additional 14 shares during the last quarter. Vista Capital Partners Inc. raised its stake in shares of Meta Platforms by 1.3% during the second quarter. Vista Capital Partners Inc. now owns 1,075 shares of the social networking company’s stock worth $794,000 after acquiring an additional 14 shares in the last quarter. Arcataur Capital Management LLC grew its holdings in shares of Meta Platforms by 0.9% during the 4th quarter. Arcataur Capital Management LLC now owns 1,736 shares of the social networking company’s stock valued at $1,146,000 after purchasing an additional 15 shares during the last quarter. Finally, Acorn Creek Capital LLC grew its holdings in shares of Meta Platforms by 0.7% during the 4th quarter. Acorn Creek Capital LLC now owns 2,118 shares of the social networking company’s stock valued at $1,398,000 after purchasing an additional 15 shares during the last quarter. 79.91% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth Several equities analysts have recently issued reports on the company. Arete Research set a $735.00 target price on Meta Platforms and gave the company a “buy” rating in a research note on Tuesday, June 2nd. Sanford C. Bernstein decreased their target price on Meta Platforms from $900.00 to $850.00 and set an “outperform” rating for the company in a research report on Thursday, April 30th. Piper Sandler began coverage on Meta Platforms in a research note on Tuesday, June 2nd. They issued an “overweight” rating for the company. Needham & Company LLC reaffirmed a “hold” rating on shares of Meta Platforms in a research note on Wednesday, July 8th. Finally, Stifel Nicolaus cut their price target on Meta Platforms from $805.00 to $780.00 and set a “buy” rating on the stock in a research note on Friday, May 1st. Three analysts have rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, eight have issued a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average price target of $830.45.

Get Our Latest Analysis on Meta Platforms

Meta Platforms Stock Down 0.0% Shares of Meta Platforms stock opened at $645.85 on Tuesday. The company has a debt-to-equity ratio of 0.24, a quick ratio of 2.35 and a current ratio of 2.35. The stock has a market capitalization of $1.63 trillion, a PE ratio of 23.48, a price-to-earnings-growth ratio of 1.14 and a beta of 1.25. Meta Platforms, Inc. has a 52-week low of $520.26 and a 52-week high of $796.25. The company has a 50-day simple moving average of $604.11 and a two-hundred day simple moving average of $626.63.

Meta Platforms (NASDAQ:META – Get Free Report) last posted its quarterly earnings results on Wednesday, April 29th. The social networking company reported $10.44 EPS for the quarter, beating analysts’ consensus estimates of $6.67 by $3.77. Meta Platforms had a net margin of 32.84% and a return on equity of 36.93%. The firm had revenue of $56.31 billion for the quarter, compared to analysts’ expectations of $55.56 billion. During the same quarter in the prior year, the company posted $6.43 earnings per share. The business’s revenue for the quarter was up 33.1% on a year-over-year basis. On average, analysts anticipate that Meta Platforms, Inc. will post 29.46 EPS for the current fiscal year.

Meta Platforms Dividend Announcement The firm also recently disclosed a quarterly dividend, which was paid on Thursday, June 25th. Investors of record on Monday, June 15th were given a dividend of $0.525 per share. The ex-dividend date of this dividend was Monday, June 15th. This represents a $2.10 annualized dividend and a dividend yield of 0.3%. Meta Platforms’s dividend payout ratio (DPR) is 7.63%.

Meta Platforms News Roundup Here are the key news stories impacting Meta Platforms this week:

Positive Sentiment: Bank of America expects Meta to beat second-quarter estimates, citing healthy ad demand and AI-related improvements, with Q2 revenue now seen at $60.6 billion and EPS at $7.50 versus consensus of $60.2 billion and $7.18. Meta Platforms expected to top earnings estimates as ad growth remains healthy, says BofA Positive Sentiment: Investors are also encouraged by reports that Meta could monetize its AI buildout more directly, including a potential large-scale computing deal with Anthropic, which could help justify its heavy capex and reduce valuation pressure. Zuckerberg Is Quietly Turning Meta Into A Compute Provider Ahead Of Q2 Earnings Positive Sentiment: BlackRock’s $12 billion financing for new Meta data centers in Texas underscores strong outside confidence in Meta’s AI infrastructure strategy and signals continued investment in future capacity. BlackRock Leads $12 Billion Financing for New Meta Data Centers in Texas Neutral Sentiment: Commentary around Meta’s expanding AI ambitions and “compute provider” strategy reinforces the bullish AI narrative, but the market is still waiting for proof that the spending will translate into durable returns. Meta’s AI Ambitions Keep Expanding. Is META Stock Keeping Up? Neutral Sentiment: Meta faces a Tennessee trial over claims Instagram was designed to be addictive, adding headline risk and potential legal overhang for the stock. Meta faces Tennessee trial over allegations Instagram was designed to be addictive Negative Sentiment: Reports of temporary Facebook and Instagram outages may add near-term frustration for users and advertisers, though the impact appears more operational than fundamental. Users of Meta’s Facebook, Instagram report suffering some outages Insider Buying and Selling In other news, insider Curtis J. Mahoney sold 2,079 shares of the firm’s stock in a transaction dated Wednesday, May 27th. The shares were sold at an average price of $609.92, for a total transaction of $1,268,023.68. Following the sale, the insider owned 1,118 shares of the company’s stock, valued at $681,890.56. This trade represents a 65.03% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Javier Olivan sold 3,348 shares of Meta Platforms stock in a transaction that occurred on Monday, July 6th. The stock was sold at an average price of $600.97, for a total transaction of $2,012,047.56. Following the completion of the sale, the chief operating officer owned 9,498 shares of the company’s stock, valued at $5,708,013.06. This represents a 26.06% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 37,948 shares of company stock worth $23,184,319. 13.53% of the stock is owned by corporate insiders.

Meta Platforms Company Profile (Free Report)

Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.

Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.

See Also Five stocks we like better than Meta Platforms The Ugliest Stocks in the Market Just Got a Very Expensive Vote of Confidence Is Domino’s Stock Serving Up a Buying Opportunity? A $1T Black Hole: SpaceX Eyes Pentagon AI to Break Free Why Gold Miners Could Be the Market’s Biggest Comeback Story Want to see what other hedge funds are holding META? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Meta Platforms, Inc. (NASDAQ:META – Free Report).

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Gallagher Capital Advisors LLC boosted its stake in shares of Meta Platforms, Inc. (NASDAQ:META – Free Report) by 91.6% during the 1st quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The fund owned 3,854 shares of the social networking company’s stock after acquiring an additional 1,842 shares during the quarter. Meta Platforms comprises about 1.4% of Gallagher Capital Advisors LLC’s investment portfolio, making the stock its 23rd biggest position. Gallagher Capital Advisors LLC’s holdings in Meta Platforms were worth $2,205,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Other hedge funds and other institutional investors have also added to or reduced their stakes in the company. Brighton Jones LLC increased its position in shares of Meta Platforms by 1.7% during the 4th quarter. Brighton Jones LLC now owns 34,551 shares of the social networking company’s stock valued at $20,230,000 after purchasing an additional 570 shares during the last quarter. Revolve Wealth Partners LLC raised its holdings in Meta Platforms by 10.2% during the 4th quarter. Revolve Wealth Partners LLC now owns 9,456 shares of the social networking company’s stock valued at $5,537,000 after buying an additional 875 shares during the period. Headwater Capital Co Ltd lifted its position in Meta Platforms by 294.7% in the first quarter. Headwater Capital Co Ltd now owns 150,000 shares of the social networking company’s stock worth $86,454,000 after buying an additional 112,000 shares during the last quarter. Dymon Asia Capital Singapore PTE. LTD. bought a new stake in Meta Platforms in the second quarter worth $213,000. Finally, Capital & Planning LLC bought a new stake in Meta Platforms in the second quarter worth $322,000. 79.91% of the stock is currently owned by hedge funds and other institutional investors.

Meta Platforms News Summary Here are the key news stories impacting Meta Platforms this week:

Positive Sentiment: Bank of America expects Meta to beat second-quarter estimates, citing healthy ad demand and AI-related improvements, with Q2 revenue now seen at $60.6 billion and EPS at $7.50 versus consensus of $60.2 billion and $7.18. Meta Platforms expected to top earnings estimates as ad growth remains healthy, says BofA Positive Sentiment: Investors are also encouraged by reports that Meta could monetize its AI buildout more directly, including a potential large-scale computing deal with Anthropic, which could help justify its heavy capex and reduce valuation pressure. Zuckerberg Is Quietly Turning Meta Into A Compute Provider Ahead Of Q2 Earnings Positive Sentiment: BlackRock’s $12 billion financing for new Meta data centers in Texas underscores strong outside confidence in Meta’s AI infrastructure strategy and signals continued investment in future capacity. BlackRock Leads $12 Billion Financing for New Meta Data Centers in Texas Neutral Sentiment: Commentary around Meta’s expanding AI ambitions and “compute provider” strategy reinforces the bullish AI narrative, but the market is still waiting for proof that the spending will translate into durable returns. Meta’s AI Ambitions Keep Expanding. Is META Stock Keeping Up? Neutral Sentiment: Meta faces a Tennessee trial over claims Instagram was designed to be addictive, adding headline risk and potential legal overhang for the stock. Meta faces Tennessee trial over allegations Instagram was designed to be addictive Negative Sentiment: Reports of temporary Facebook and Instagram outages may add near-term frustration for users and advertisers, though the impact appears more operational than fundamental. Users of Meta’s Facebook, Instagram report suffering some outages Analyst Upgrades and Downgrades A number of research analysts have weighed in on the stock. Barclays boosted their price objective on shares of Meta Platforms from $800.00 to $830.00 and gave the company an “overweight” rating in a research report on Thursday, April 30th. Royal Bank Of Canada restated an “outperform” rating and issued a $810.00 target price on shares of Meta Platforms in a report on Monday, June 1st. Sanford C. Bernstein dropped their price target on shares of Meta Platforms from $900.00 to $850.00 and set an “outperform” rating for the company in a research note on Thursday, April 30th. Mizuho cut their price target on shares of Meta Platforms from $850.00 to $835.00 and set an “outperform” rating on the stock in a report on Tuesday, May 5th. Finally, Wolfe Research cut their price target on shares of Meta Platforms from $850.00 to $800.00 and set an “outperform” rating on the stock in a report on Friday, April 10th. Three investment analysts have rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, eight have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, Meta Platforms currently has a consensus rating of “Moderate Buy” and an average target price of $830.45.

Check Out Our Latest Stock Analysis on Meta Platforms

Insider Activity at Meta Platforms In other Meta Platforms news, COO Javier Olivan sold 3,348 shares of the business’s stock in a transaction dated Monday, July 6th. The shares were sold at an average price of $600.97, for a total value of $2,012,047.56. Following the completion of the sale, the chief operating officer directly owned 9,498 shares of the company’s stock, valued at $5,708,013.06. The trade was a 26.06% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Curtis J. Mahoney sold 2,079 shares of the company’s stock in a transaction dated Wednesday, May 27th. The stock was sold at an average price of $609.92, for a total transaction of $1,268,023.68. Following the completion of the transaction, the insider owned 1,118 shares in the company, valued at $681,890.56. This represents a 65.03% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 37,948 shares of company stock worth $23,184,319 in the last 90 days. 13.53% of the stock is owned by corporate insiders.

Meta Platforms Stock Performance Shares of Meta Platforms stock opened at $645.85 on Tuesday. The company has a quick ratio of 2.35, a current ratio of 2.35 and a debt-to-equity ratio of 0.24. The stock’s fifty day moving average is $604.11 and its two-hundred day moving average is $626.63. Meta Platforms, Inc. has a 52 week low of $520.26 and a 52 week high of $796.25. The company has a market capitalization of $1.63 trillion, a PE ratio of 23.48, a price-to-earnings-growth ratio of 1.14 and a beta of 1.25.

Meta Platforms (NASDAQ:META – Get Free Report) last released its earnings results on Wednesday, April 29th. The social networking company reported $10.44 earnings per share for the quarter, topping the consensus estimate of $6.67 by $3.77. The business had revenue of $56.31 billion during the quarter, compared to the consensus estimate of $55.56 billion. Meta Platforms had a return on equity of 36.93% and a net margin of 32.84%.The business’s revenue for the quarter was up 33.1% compared to the same quarter last year. During the same period last year, the company earned $6.43 earnings per share. As a group, analysts expect that Meta Platforms, Inc. will post 29.46 earnings per share for the current year.

Meta Platforms Announces Dividend The business also recently declared a quarterly dividend, which was paid on Thursday, June 25th. Investors of record on Monday, June 15th were paid a $0.525 dividend. This represents a $2.10 annualized dividend and a yield of 0.3%. The ex-dividend date of this dividend was Monday, June 15th. Meta Platforms’s dividend payout ratio (DPR) is currently 7.63%.

Meta Platforms Company Profile (Free Report)

Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.

Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.

Featured Stories Five stocks we like better than Meta Platforms The Ugliest Stocks in the Market Just Got a Very Expensive Vote of Confidence Is Domino’s Stock Serving Up a Buying Opportunity? A $1T Black Hole: SpaceX Eyes Pentagon AI to Break Free Why Gold Miners Could Be the Market’s Biggest Comeback Story Want to see what other hedge funds are holding META? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Meta Platforms, Inc. (NASDAQ:META – Free Report).

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Meta Platforms (NASDAQ: META) involvement with the artificial intelligence (AI) ‘boom’ has been undergoing numerous and rapid changes in 2026 and, according to Rothschild & Co Redburn analysts, the latest shift is a positive one.

Specifically, the Wall Street analysis firm noted that Meta’s move from consumer AI models to AI tools for small businesses is a step in the right direction, as it explained it would increase margins and returns, widen the technology giant’s moat, and prolong the growth runway.

Thus, Rothschild & Co Redburn maintained the ‘Buy’ rating for Mark Zuckerberg’s firm and increased the 12-month stock price target from $900 to $1,000 – from a 38.5% upside from the press time price of $649.83 to 53.89%.

Elsewhere, the latest Meta stock rating and price target revision is in line with the attitude generally displayed by Wall Street analysts. Indeed, the blue-chip technology giant is overall considered a ‘Strong Buy,’ with 35 positive and 5 ‘Neutral’ recommendations.

Similarly, the average Meta stock price target for the next 12 months is bullish as it forecasts a 24.79% rally to $805.98, per the data Finbold retrieved from TipRanks on July 21.

Wall Street sets Meta stock price target for next 12 months. Source: TipRanks Notably, however, despite being directionally in line, Rothschild & Co Redburn’s forecast is substantially higher than most estimates and just $15 short of the Street high of $1,015.

Meanwhile, there is a risk that the overwhelming institutional positivity toward Meta shares might be obfuscating a series of systemic risks for the company.

To begin with, Mark Zuckerberg’s company has, so far, been stumbling through the ‘AI boom,’ with a series of projects that were, ultimately, either deprioritized or dropped. 

Additionally, previous remarks that the firm likely has a use for its compute led to a decision to rent out said capacity, with Anthropic coming in as a likely buyer. 

The world’s second AI company is already a subscriber to SpaceX’s (NASDAQ: SPCX) data centers, and its entry into the game casts as big a question regarding demand as the decisions to rent out by several blue-chip giants do regarding supply.

Lastly, Meta Platforms’ overall position might be weaker than it appears at face value, considering the staggering scale of its ‘hidden debt,’ while the overall $1.65 trillion figure for it and four other technology firms could be signalling that the entire sector is unstable.

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Umělá inteligence už dávno není jen příběhem o Nvidii, datových centrech a stále výkonnějších modelech. Podle AI specialisty Šimona Podhájského se investoři často příliš soustředí na samotné modely a přehlížejí oblasti, kde se bude vytvářet skutečná hodnota. V podcastu Patria Finance hovořil o budoucnosti AI agentů, investičních příležitostech i o tom, proč mohou být největším rizikem AI systémy, které začneme používat bez dostatečné kontroly.

Když se dnes mluví o umělé inteligenci, debata se často točí kolem několika známých jmen. OpenAI, Anthropic, Google, Nvidia nebo Meta představují tváře technologické revoluce, která během posledních let zásadně změnila očekávání investorů i firem. Podle Šimona Podhájského, AI inženýra ze společnosti Curebase a dlouholetého praktika v oblasti jazykových modelů, je však skutečnost mnohem složitější.

„Myslím si, že hodně lidí si myslí, že záleží jenom na tom, kdo má ty modely. A že to jsou Amerika a Čína. Já si naopak myslím, že hodně záleží na aplikační vrstvě a na těch ‚harnessech‘, tedy na tom, jak si ten model osedláme a použijeme,“ říká Podhájský. Právě způsob nasazení AI podle něj často rozhoduje více než samotná kvalita základního modelu.

AI už je dál, než si většina lidí myslí

Z pohledu technologického vývoje vidí Podhájský současný stav AI podobně jako internet na konci 90. let. „Řekl bych, že jsme někde kolem roku 1999. Už vidíme ten slib, ale současně investujeme do AI i v oblastech, které ještě nemusí být rentabilní,“ říká.

Zároveň odmítá představu, že budoucnost AI je teprve před námi. „Budoucnost už je do značné míry tady, jenom není rovnoměrně rozdělená,“ parafrázuje známý výrok Williama Gibsona. Podle něj už dnes existují firmy, které využívají AI agenty jako digitální kolegy schopné samostatně vykonávat celé pracovní procesy. Většina trhu se s těmito možnostmi teprve seznamuje.

Věří i v možnost vzniku takzvaného „one-person unicorn“, tedy miliardové firmy řízené jediným člověkem za pomoci AI. „Může se vyplnit předpověď Sama Altmana, že vznikne první jednorožec vytvořený a provozovaný jediným člověkem. Struktura firem se může výrazně změnit,“ říká Podhájský.

Velkou hodnotu vytvoří data

Přestože veřejnost často sleduje souboj největších modelů, Podhájský vidí konkurenční výhodu firem jinde. „Myslím si, že datasety a jejich kvalita jsou čím dál důležitější pro dosahování dalších úrovní modelů,“ vysvětluje. To platí nejen při samotném trénování AI, ale také při jejím nasazení ve firmách.

Podle něj dnes řada společností řeší AI dříve, než mají vyřešenou vlastní datovou infrastrukturu. „Firmy si často řeknou: všichni mají AI, musíme mít také AI. Ale přitom ještě nemají správně nastavené vlastní datové sklady nebo procesy,“ upozorňuje. Právě schopnost pracovat s unikátními daty vidí jako jeden z nejdůležitějších investičních příkopů budoucnosti. „Pokud bych hledal investiční „moat“, hledal bych firmu s vlastním datasetem, který konkurence nedokáže jednoduše replikovat,“ říká.

Software bude levnější. Ne všechny firmy to přežijí

Jedním z momentálně nejdiskutovanějších témat na trzích je dopad AI na softwarový sektor. Akcie některých tradičních softwarových firem v posledních kvartálech zaostávaly právě kvůli obavám investorů, že vývoj softwaru bude díky AI výrazně levnější. Podhájský tyto obavy do značné míry sdílí. „Myslím si, že tvorba softwaru bude čím dál levnější a že AI bude ukusovat stále větší část vývoje,“ říká.

Současně ale upozorňuje, že nejde jen o to, že si jednotlivci budou schopni vytvářet vlastní aplikace. „Větší problém je, že se zmenšuje konkurenční výhoda zavedených firem vůči novým konkurentům. Je jednodušší architektovat složité aplikace než dřív,“ vysvětluje.

Neznamená to však automatický zánik velkých softwarových společností. Jako příklad uvádí Adobe. Nevěří totiž, že by AI vedla k masovému vytváření plnohodnotných alternativ Photoshopu. „Trh podle mě Adobe podhodnocuje možná až příliš. AI sice ukusuje část jeho využití, ale neznamená to automaticky konec firmy,“ míní.

Kde leží investiční příležitosti

Přestože se Podhájský označuje za zastánce hypotézy efektivních trhů a většinu vlastních investic směřuje do ETF fondů, vidí několik oblastí, které mohou být zajímavé i pro investory. První z nich souvisí s rostoucí produkcí obsahu generovaného AI. „Soudy, grantové agentury nebo vydavatelé knih se začínají topit v množství textů generovaných umělou inteligencí,“ upozorňuje. Obrovský potenciál proto vidí v nástrojích schopných tento obsah filtrovat. „Čekám, že přijde software, který bude umět lépe rozlišit, co musí zkontrolovat člověk a co lze zpracovat automaticky,“ říká.

Ještě větší příležitost ale vidí ve vědeckém výzkumu. „Oblast, od které si slibuji výrazný posun, je automatizovaná věda,“ tvrdí. Zmiňuje přitom například český startup Theorema, který se zaměřuje na automatizaci laboratorního výzkumu. Tato oblast navazuje na úspěchy projektů typu AlphaFold, jenž dramaticky urychlil výzkum proteinových struktur. „AI bude nejúspěšnější tam, kde je jednoduché ověřit správné řešení,“ vysvětluje Podhájský.

Největší riziko? Ne Skynet, ale postupná ztráta kontroly

I když v představách lidí často převažuje hrozba AI typu Skynet, Podhájský za pravděpodobnější hrozbu považuje něco mnohem méně nápadného. „Myslím si, že AI nám ublíží tam, kde ji nasadíme a neumíme ověřit, jestli dělá správnou věc,“ říká. Jako příklad uvádí schvalování hypoték, přijímání zaměstnanců nebo vyhodnocování žádostí.

Zvláštní obavy má i z fenoménu, který označuje jako postupné vzdávání se rozhodovacích pravomocí. „Může se stát, že budeme čím dál víc delegovat ekonomicky relevantní činnosti na AI agenty a přestaneme sami rozhodovat,“ upozorňuje.

Podle něj dnes existují dva způsoby využití AI. Ten první označuje za pozitivní. „Lidé používají AI jako kognitivní multiplikátor. Zkoumají víc věcí, rychleji získávají informace a lépe přemýšlejí.“ Druhý scénář je ale problematičtější. „AI se může stát kognitivní protézou. Místo toho, abychom přemýšleli, delegujeme celé rozhodnutí na stroj,“ varuje.

AI jako nástroj, ne náhrada člověka

Přesto Podhájský zůstává v zásadě optimistou. AI používá denně a považuje ji za mimořádně užitečný nástroj. Existují však oblasti, které by stroji nesvěřil. „Nepoužil bych AI na svatební sliby,“ říká s úsměvem.

Stejně skeptický je k tomu, aby AI plánovala zásadní životní rozhodnutí. „Nepoužiju ji na tvorbu plánů toho, co chci se svým životem dělat. Ty plány, se kterými většinou přijde, jsou příliš průměrné.“

Právě zde podle něj leží hranice mezi nástrojem, který člověka posiluje, a technologií, která ho postupně zbavuje autonomie.A to může být nakonec mnohem důležitější otázka než to, který model právě vede benchmarky nebo zda Nvidia dokáže i za několik let obhájit své výjimečné marže.

Meta Platforms (META 0.06%) is focusing on its AI development.

*Stock prices used were the afternoon prices of July 17, 2026. The video was published on July 19, 2026.

Parkev Tatevosian, CFA has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) is expected to deliver second quarter results above Wall Street expectations when it reports earnings on July 29, according to Bank of America analysts, who believe that healthy advertising demand and AI-driven improvements should support revenue and earnings despite foreign exchange headwinds.

Bank of America revised its estimates and now expects Meta to report Q2 revenue of $60.6 billion and earnings per share of $7.50, above the consensus estimates of $60.2 billion and $7.18, respectively. The firm wrote that stronger advertising trends were partially offset by the recent depreciation of the US dollar.

The analysts wrote that their channel checks indicate healthy ad growth during the quarter and expect upside to earnings following Meta's workforce reductions in May. They also estimate that investors will focus on AI-related initiatives during the earnings call, including content retrieval and advertising improvements from AI model integration, opportunities for Muse Spark, and the potential for external compute sales.

Looking ahead, Bank of America expects Meta to guide Q3 revenue to between $60.5 billion and $63.5 billion, representing growth of roughly 18% to 24% year over year. The firm estimates Q3 revenue of $63.5 billion and earnings per share of $7.22, compared with consensus expectations of $63 billion and $7.03.

On spending, the analysts estimate Meta could lower the upper end of its expense guidance by $1 billion to $2 billion following recent layoffs. However, they also see the potential for the company to raise its capital expenditure outlook to between $135 billion and $150 billion from the current range of $125 billion to $145 billion, citing higher memory costs.

Bank of America also raised its longer-term forecasts, adding $5 billion in estimated 2027 revenue to reflect potential AI capacity benefits following reports of a possible compute agreement with Anthropic. The firm now estimates 2027 revenue of $316 billion and earnings per share of $35.00, while also increasing its 2028 revenue forecast.

The bank reiterated its ‘Buy’ rating and maintained its $835 price objective, above current levels of about $650.

It wrote that Meta's valuation does not fully reflect the potential benefits of expanding AI capacity and identified growing visibility into new revenue streams, advertising gains from large language model integration, continued AI model improvements and chip advances as potential drivers of future sentiment.

It also highlighted risks including the possibility of higher 2027 capital spending, capital raises and an upcoming social media addiction trial expected to begin in August.

Meta Platforms, Inc.'s Q2 earnings will focus on CapEx guidance (already revised for 2026); market sentiment hinges on Meta's ability to monetize AI infrastructure investments. Meta's recent pivot toward becoming a neocloud provider and compute lessor, including a potential $10B Anthropic deal, could reduce its persistent valuation discount by providing a path to such monetization. Integration of AI models within Meta's social ecosystem and the scaling of Meta Glasses are key forward catalysts, though risks remain around CapEx returns and hyperscaler competition.

A severe macroeconomic grid power shortage has quietly transformed physical artificial intelligence (AI) compute capacity into the technology sector's most valuable commodity. By leveraging its vast infrastructure to lease processing power to Anthropic, Meta Platforms NASDAQ: META is aggressively pivoting from a hardware consumer to a commercial cloud landlord, challenging established hyperscalers directly at the compute bottleneck.

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Shorting the Plug: The 100-Gigawatt Grid ShockMeta Platforms Today

$652.29 +6.28 (+0.97%)

As of 12:31 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$520.26▼

$796.25Dividend Yield0.32%

P/E Ratio23.71

Price Target$830.45

The conversation around artificial intelligence has historically centered on silicon. Investors constantly ask how many chips a business can buy and how fast it can deploy them. That narrative is rapidly evolving. Banking analysts project a U.S. electricity supply gap exceeding 100 gigawatts by 2030. Upgrading the domestic power grid requires high-voltage transformers and transmission lines that are currently experiencing multi-year manufacturing backlogs.

The primary bottleneck is no longer just securing graphics processing units, but finding an energized facility to plug them in. Companies with existing physical footprints, secured data centers, and locked-in power purchase agreements hold a structural advantage that competitors cannot replicate by raising capital.

Building Business: The 14-Gigawatt InfrastructureMeta Platforms is navigating an immense capital expenditure cycle. Management projects spending between $125 billion and $145 billion in 2026 alone, predominantly directed toward AI hardware and data center expansion.

To the untrained eye, that level of cash burn looks like an operational liability. When a technology enterprise spends that aggressively, market participants typically worry about margin compression, fearing that the upfront costs will erode bottom-line profitability before the investments generate a measurable return.

Viewing this purely as an expense misses the strategic land grab taking place. Meta Platforms is essentially acquiring highly sought-after real estate in a supply-shocked compute market.

The internal initiative, Meta Compute, aims to build approximately 14 gigawatts of AI compute capacity by 2027. Meta Platforms is bypassing the utility grid bottlenecks that currently paralyze smaller developers. The underlying enterprise value is shifting from purely digital advertising yields to the direct ownership of secured, energized infrastructure.

Signing the Lease: Anthropic Rents Meta's PowerThe clearest validation of this infrastructure thesis surfaced with preliminary negotiations to lease data center computing capacity to AI developer Anthropic. The proposed transaction is valued at up to $10 billion over 2 years and structured as monthly installments. The deal reportedly includes mutual early-termination clauses, acting as a pragmatic safety valve should Meta Platforms require the physical capacity for its own internal development.

Why would a tier-one AI developer bypass traditional hyperscalers like Amazon's NASDAQ: AMZN Web Services or Microsoft's NASDAQ: MSFT Azure? The decision comes down to absolute necessity and compute scarcity. Anthropic has faced substantial processing bottlenecks, previously enforcing usage limits on advanced models like Claude Fable because Anthropic lacked the raw capacity to run them at scale. Securing processing power from a social media giant mirrors Anthropic's recent multi-billion-dollar infrastructure lease with SpaceX. Top-tier AI developers are scouring the market for any energized compute they can find, regardless of the provider's primary industry.

Meta Platforms is not treating this as a temporary favor. The strategic hiring of former AWS Senior Vice President Dave Brown to lead Meta Compute signals a formalized assault on enterprise cloud market share. At the May 2026 shareholder meeting, management explicitly validated these commercial cloud ambitions, confirming that they receive weekly inbound inquiries for spare compute capacity. Meta Platforms is taking dormant GPU stockpiles intended for internal open-source model development and generating immediate commercial yield.

Collecting the Rent: High-Margin Infrastructure YieldTransitioning idle hardware into a $10 billion revenue stream creates a highly efficient strategic dynamic. Meta Platforms captures recurring, high-margin revenue from an industry peer while pricing its scarce physical processing power at a premium. This recurring revenue helps subsidize the immense capital expenditure required to build out the 14-gigawatt footprint, directly mitigating the margin compression investors initially feared.

Fundamentally, the underlying business remains remarkably robust. Meta's stock price recently closed at $646.

Meta Platforms, Inc. (META) Price Chart for Monday, July, 20, 2026

Meta has a market capitalization of $1.63 trillion and trades at a trailing price-to-earnings ratio of 23.48, compared with a forward multiple of 21.93. When the forward multiple is lower than the trailing multiple, it indicates analysts expect earnings to grow faster than the current share price implies, suggesting a relatively grounded valuation given the broader technology sector's premium pricing.

Profitability metrics underscore a highly efficient operation. Meta Platforms commands a net margin of 32.84% and an exceptional return on equity of 36.93%. A high return on equity indicates that management is efficiently generating profits from shareholders' capital. Building physical data centers is historically a low-margin endeavor, but operating with a 36% ROE implies Meta Platforms knows how to extract maximum value from every dollar deployed. The balance sheet remains flush with liquidity, carrying a current ratio of 2.35 and a conservative debt-to-equity ratio of 0.24.

During the first quarter, Meta Platforms delivered a $3.77 earnings-per-share beat alongside a 33.1% year-over-year revenue growth. Despite the aggressive capital expenditure cycle, management continues to prioritize shareholder yield. The recent implementation of a 52.5-cent-per-share quarterly dividend provides a crucial baseline of support for long-term investors waiting for the hyperscaler pivot to mature.

The Sublet Trap: When Meta Needs Its Own PowerEvery major business model pivot carries execution risk. The core premise is that Meta Platforms possesses dormant compute stockpiles. Sustained use by external entities like Anthropic could eventually lead to compute rationing for internal open-source Llama model development. If Meta Platforms leases too much power, the organization risks stalling its own AI advancements.

Transitioning to a commercial hyperscaler forces the company into direct, capital-intensive competition with established cloud providers. This shift introduces enterprise-level sales and business-to-business support requirements to an organization that has historically been optimized for consumer data and digital advertising.

Investors tracking insider behavior will notice a net selling trend, reflecting capital distribution among executives. A confirmed transaction occurred on July 7, involving a corporate director liquidating $303,875.00 in equity. While insider selling often reflects routine portfolio diversification or tax obligations, it remains a metric worth monitoring during a structural transition.

Holding the Deed: Why Infrastructure Beats SiliconThe shift from a hardware consumer to a provider of physical infrastructure represents a fundamental evolution in how the market should value Meta Platforms. The secured data centers, power agreements, and localized grid connections are forming a physical moat that competitors will struggle to breach before the end of the decade.

Investors seeking exposure to the structural power shortages in the AI supply chain might want to evaluate companies that already hold energized assets rather than focusing solely on chip designers. Evaluating the upcoming July 29 earnings call for updates on the Anthropic lease and the broader Meta Compute initiative could provide valuable clarity on the pace of this cloud transition. Cautious market participants may prefer to watch how effectively the new enterprise sales division scales operations before allocating fresh capital to the space.

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Meta has become the poster child for the hyperscaler AI spending race. 2026 has been a tug of war between blockbuster earnings and rising anxiety about capex translation into shareholder returns. Our proprietary model sees material upside from here.

Our 24/7 Wall St. price target for Meta Platforms (NASDAQ: META | META Price Prediction) is $892.70 over the next 12 months, implying 38.19% upside from $646.01. The recommendation is a buy with high confidence (90%).

24/7 Wall St. Price Target Summary Metric Value Current Price $646.01 24/7 Wall St. Price Target $892.70 Upside 38.19% Recommendation BUY Confidence Level 90% Why META Has Traded Sideways Despite a Blowout Quarter Meta is down 1.96% year to date and 7.6% over the past year, sitting 4% below its 52-week high of $793.65.

Q1 2026 delivered revenue of $56.31 billion growing 33.08% year over year and EPS of $10.44 beating consensus by 56.79%, the fifth straight beat. Yet shares fell 8.55% as investors digested a raised full-year capex range of $125 to $145 billion.

A Benzinga report flagged a potential $10 billion AI deal with Anthropic, and JPMorgan described Meta’s aggressive Model API pricing as “the first significant step toward monetizing its substantial AI investments beyond advertising.”

The Case for $1,015 and Higher Bulls argue advertising funds AI expansion. Q1 ad impressions rose 19% YoY and price per ad rose 12%, with Family of Apps daily active people at 3.56 billion. Zuckerberg framed the strategy plainly: “Our biggest milestone so far this year has been the release of our Muse family of models.”

UBS carries a Buy with a $766 target, and analyst coverage skews 57 Buy ratings versus 6 Holds and zero Sells. Our bull case pegs META at $1,015.75, a 57.23% return.

What Could Go Wrong The bear case centers on capex return on investment. FY25 capex hit $72.22 billion and 2026 guidance stretches to $145 billion. Reality Labs continues to bleed with a $4.03 billion Q1 operating loss. Regulatory overhang includes 2026 youth-related trials that could produce material judgments.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

Susan Li acknowledged the planning tension: “We have continued to underestimate our compute needs even as we have been ramping capacity significantly.” Free cash flow of $43.59 billion in FY25 gives Meta room to absorb misfires. Our bear case leaves META at $765.23, an 18.45% gain.

How Meta Stacks Up Against Alphabet and Pinterest Alphabet (NASDAQ: GOOGL) is the sharpest comp: another ad-funded hyperscaler racing on AI infrastructure. Alphabet’s Q1 2026 revenue grew 21.8% to $109.9 billion with Google Cloud up 63%, and management guided 2026 capex to $175 to $185 billion. Alphabet’s growth is faster today, but Meta’s 21 forward P/E versus Meta’s higher earnings acceleration keeps our target defensible.

Pinterest (NYSE: PINS) is the small-cap visual-discovery comp. Pinterest Q1 2026 revenue grew 17.84% to $1.01 billion with 631 million MAUs, but lacks Meta’s 3.56 billion DAP scale and cash-generation profile. That gap makes our multiple assumptions for META reasonable.

I’d Buy It Here The 24/7 Wall St. price target is $892.70 with a buy rating and 90% confidence. Forward EPS of $41.14 against a 21 forward multiple leaves room.

I would buy here if Q2 revenue lands inside the $58 to $61 billion guide and ad pricing stays double digits. I would stay on the sidelines if 2027 capex guidance leaks materially above 2026 without a monetization roadmap.

Year 24/7 Wall St. Price Target 2026 $892.70 2027 $1,050 2028 $1,235 2029 $1,415 2030 $1,598.80 These projections assume Meta executes on Superintelligence Labs and defends ad share. Significant upside or downside could come from AI monetization pace and regulatory rulings in youth-related litigation.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

Meta Platforms is leveraging AI capex to drive both internal ad growth and new external monetization opportunities. META is negotiating a $10 billion, two-year AI compute deal with Anthropic, signaling a shift toward AI cloud revenue streams. Even modest external AI cloud deals could provide significant EPS upside, with $20 billion in AI cloud revenue equating to a $5+ EPS boost.

Since the 2022 bear market bottomed nearly four years ago, Wall Street's historic rally has been driven by two catalysts: the evolution of artificial intelligence (AI) and the leadership of the "Magnificent Seven."

The beauty of the Magnificent Seven is that they all possess one or more sustainable competitive advantages, providing them with ample cash flow to undertake intriguing growth initiatives. This includes social media maven Meta Platforms (META 2.79%), which is among the 13 publicly traded companies on U.S. exchanges to be valued at north of $1 trillion.

But sometimes high-growth initiatives require sacrifices. Mark Zuckerberg's Meta appears set to abandon a $174 billion investment that's had a decisively positive impact on its bottom line to further its AI ambitions.

Image source: Getty Images.

Meta Platforms may be on the verge of axing this $174 billion investment Make no mistake: Meta's billionaire boss has aggressively invested in several high-growth initiatives, including the metaverse and, more recently, artificial intelligence. But it's Meta's hearty share repurchase program that's done some heavy lifting over the last decade.

Although no share buybacks were undertaken in 2016, the company has been purchasing its own stock on a regular basis ever since:

2017: $1.976 billion in full-year share buybacks 2018: $12.879 billion 2019: $4.202 billion 2020: $6.272 billion 2021: $44.537 billion 2022: $27.956 billion 2023: $19.774 billion 2024: $30.125 billion 2025: $26.248 billion

Today's Change

(

-2.79

%) $

-18.53

Current Price

$

646.01

Collectively, Meta Platforms has spent approximately $174 billion to retire nearly 12.7% of its outstanding shares. For companies with steady or growing net income, such as Meta, a steadily declining share count can result in higher earnings per share over time. In other words, share repurchases have made Meta's stock more attractive to value-seeking investors.

But with the company increasing its forecast for AI-related capital expenditures (capex), it hasn't repurchased shares since the third quarter of 2025. Furthermore, reports have suggested that Meta is weighing the option of issuing equity and undoing some of its share buybacks to fund its AI infrastructure build-out.

Image source: Getty Images.

History offers a tale of promise and peril for Meta Historically speaking, Meta's all-in approach with artificial intelligence isn't without risks. Every game-changing technology for more than three decades has endured an early stage bubble-bursting event. Meta shareholders are especially aware of this historical correlation, given the company's poor performance in 2022 after the metaverse bubble burst.

The puzzle pieces for an AI bubble are firmly in place. If history were to rhyme and the AI bubble bursts, Meta Platforms' stock would likely be weighed down, at least over the short term.

Big Tech CapEx has reached unprecedented levels:

The combined CapEx of Amazon, $AMZN, Google, $GOOG, Meta, $META, and Microsoft, $MSFT, is expected to surge +98% YoY, to a record $715 billion in 2026.

This is nearly 3 TIMES the amount spent in 2024 and more than 5 TIMES 2023... pic.twitter.com/L29Dx8JaAi

-- The Kobeissi Letter (@KobeissiLetter) May 2, 2026 At the same time, Meta is one of the few companies enjoying immediate benefits from the integration of AI solutions. Incorporating generative AI into its advertising platforms has enabled Meta's clients to tailor static and video messages to users. This can improve click-through rates and enhance Meta's already impressive ad pricing power.

Zuckerberg's company also recently unveiled plans to sell excess AI data center compute capacity. This should help ease the sting of Meta's otherworldly AI capex, especially given its sustainable competitive edge and robust cash flow tied to its social media assets.

Meta's AI investments should pay off in the long term, but the ride could be bumpy without share buybacks as an added catalyst.

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discuss:

Meta’s new AI models and pricing strategyDoes Meta have a strategy or just “trying things”?Is GE Vernova overvalued?Can American Tower overcome its challenges?To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on July 9, 2026.

Tyler Crowe: Meta is making even bigger AI bets today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today, I'm joined by longtime contributors, Matt Frankel and Jon Quast. Today we're going to dive into a couple mailbag questions. We got questions about GE Vernova. We got questions about REITs, which I think definitely had Matt excited to talk about today. But we want to start today with two relatively large announcements from Meta Platforms today, all of which related to AI. One of them was the launch of its Muse Spark 1.1 artificial intelligence model, the next iteration of what they've been doing with AI models. The second was it announced its plans to put its own AI chip into production. It's going to start in September with both Broadcom and Taiwan Semi as kind of the designers, manufacturers, helping them build out their own chip production capacities. Now, guys, these sound like really big moves. Help me wrap some context about what we're seeing here with these.

Jon Quast: As far as the model goes from Meta Platforms, this is actually a pretty big upgrade in a couple of areas. You wouldn't normally be inclined to think so. I was tempted to overlook this just going from 1.0 to 1.1 here with Muse Spark. But in here that I think is significant, one is the context window. They're going to provide a 1-million-token context window. What this does is it allows an AI agent to essentially work longer on a task without forgetting what it's doing. That's actually a problem with some models out there. You'll send an AI agent to work. It loses context, it forgets what it's doing, it keeps working and keeps spending your money. That's a problem. A 1 million token context window, this is roughly four times as big as the 1.0 Version of Muse Spark. That's a really significant upgrade.

The other big change here that I'm seeing here is, this is a this is now being launched to people to use. There's pricing to go with this. If you look at the pricing, it's more than 50% times cheaper than competitive products from Anthropic and OpenAI. That's both for the input and the output. That is really significant when you think about these two businesses because anthropic and OpenAI, they need the products that they have out there. That's what they do. Meta has a whole other business paying the bills, and it does this on the side. It has the luxury of this aggressive pricing. That is something really significant to note with Muse Spark 1.1.

Matt Frankel: With the chips, I'm not sure if it's as significant as the model. This is essentially what Google and Amazon do. These chips, as Tyler mentioned, they're designed with the help of Broadcom and manufactured by Taiwan Semi. This is the essential model that Apple uses to design its own iPhone chips. The goal here is to really reduce the company's dependence on Nvidia and AMD processors that are really expensive as the company aims to build out its compute power and double it again next year, really the idea is that these chips are going to handle the easier side of AI tasks. They're still going to need the more powerful Nvidia ones for.

Tyler Crowe: I want to put this in context of everything we've seen from Meta recently because this to me seems like the biggest major announcement or it's a couple in what I would say is major announcements for Meta. It's been using a lot of creative financing to build data centers. To your point, the amount that they're adding this year, doubling that next year, it's made some announcements with Smart Glasses. It recently announced a prediction market asset. I know I'm missing a few deals in announcement there, but I think it gets to the broader point, there's a lot of things going on here.

When I look at Meta and I see all of these things that it's doing, I am less impressed. I see an unfocused company that's throwing a lot of spaghetti at the wall to see what sticks. The company seems to be all in with these new ideas that end up maybe not doing as much and it all reverts back to the basic advertising model that they've had for so long with Facebook, Instagram, what have you. Now, I brought this up before, but the company really dodged a bullet, I would say, with all of that investment in data centers for its reality labs, virtual reality efforts, being able to basically pivot quickly to AI and be like, we don't have to write this down because now it's all AI stuff. Here's my broader question, putting all that in context. Should investors be excited about these new moves and things that they're doing? Because to me, I just see an undisciplined company trying to look like something that it isn't.

Matt Frankel: Well, throughout Meta's history, the company has proven that it's exceptionally good at doing one thing, and that's making money from its core advertising business. If you compare Facebook's average revenue per user to that of Pinterest or Snap, for example, it's not even in the same ballpark. But to your point, Tyler, any attempt that they've made, and they've made quite a few to build out a second significant revenue stream, hasn't really gone anywhere. All the metaverse spending you mentioned.

As far as the chips are concerned, I'm not really sure what to make of it from a potential standpoint. On one hand, if it meaningfully reduces their spend on Nvidia and AMD GPUs, it could be a positive in the sense that their capex is going to go a longer way when they're building out all their compute power. But on the other hand, they're still going to have to buy a lot of Nvidia and AMD chips. They actually signed the biggest AI deal in history to buy AMD chips for the hardest AI jobs. In the near term, focusing on building out their own chip production could actually increase the company's capex needs.

In a nutshell, they're doing what Google and Amazon have already been doing for years, building chips to handle the easier AI workloads and still relying on Nvidia and AMD for the rest. This could be an efficiency win for the company, but I really don't see it as a major needle movers, even in terms of cost structure. If it pans out as expected, I'd actually see it as a bigger needle mover for Broadcom than I would for Meta.

Jon Quast: If we say that Meta is just throwing spaghetti at the wall, then I say, Andiamo Mangare, let's eat because this is actually going really well for them. You look at 2025, 20% growth in income from operations. We come into 2026, it's accelerated even more. We have a 30% jump in income from operations. I know that we can say that the gains are coming from that core advertising business, and that's a fair point, but I don't know if it's so simple. I don't know if we can completely disassociate all that it's investing into AI and say, "Well, that's over here and the advertising business is over there."

I think that in reality, there's more overlap between the two than we can really parse out. I do believe that there are some gains happening as a result of it's investing in the AI side of the market. I think it's good investment. The growth speaks for itself. Growing at this scale at this speed, it's doing something even if it's throwing spaghetti at the wall. On top of that you have a stock here that is cheaper than the overall market at just 22 times earnings and growing this fast. I don't know. It's hard to find too much for me to complain about with Meta.

Tyler Crowe: I didn't have Jon speaking Italian on my Bingo card for today. Coming up next, we're going to get into listener questions. First one on GE Vernova.

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Tyler Crowe: Hey, everyone, just a quick reminder. If you do want to get a question into us, have it answered by us on air, go ahead and email us at [email protected]. That's podcast with an S @fool.com. Just remember, keep it Foolish, keep it short and don't ask for personalized advice, so we don't get in trouble with the SEC. Today's question comes from Steven Cox, and it says, "Hello, Fools, I was wondering if the team on the Hidden Gems Investing podcast could cover GE Vernova. I really love the company and think it's an essential player to the future, but it seems to be priced to perfection regardless. What does the team think?" Jon, I'm going to let you start, and then we'll see where this goes because I have some pretty deep thoughts here.

Jon Quast: My thoughts probably not as deep. Right before it was spun out when GE split up into different companies, I was tasked with writing an article for fool.com on GE Vernova and diving down deep into that at the time, I really came away just impressed with this business. I like this business. I was hesitant to invest only because it's not a space I typically follow, and I was nervous I didn't hear other people talking about it. I just doubted myself, but wow, what a mistake to not invest. This has been an incredible stock since GE spun it out. I believe it's up over 700%. What I will point out here is that most of the gains recently have been valuation, and just take that for what it's worth.

Essentially the business is doing one thing, the valuation is driving a lot of the stock gain. Let's just pretend for a moment here as we try to say, here's where we are now. Let's assume no expansion or contraction in the valuation from here. What can this business do for shareholders? You look at the business right now, that revenue growth in the most recent quarter, 16% growth for a business of this size, maturity, for the products that it offers with energy generation, solar, wind, turbines, many things, you look at that growth. That's really quite outstanding. Then you look at the backlog. Even greater growth than the revenues. That would point to ongoing gains in the revenue.

I do think that you have a business here that might be able to produce 15% annual returns for the stock. You add in things such as the dividend, the buybacks, all these things. Maybe a 15% when you just look at the business fundamentals itself. Now you take a step back and say, "Okay, but what about the valuation?" I don't think that's going to be a tailwind from here on out, just looking at the valuation today. Probably a little bit of a headwind, how much of a headwind? That's what I personally don't know.

Matt Frankel: Let me chime in before Tyler gives his deep thoughts here. There's a solid argument to be made that Vernova is the best position power stock for the AI infrastructure build-out. Just look at its backlog. It's $163 billion backlog. It expects that to reach $200 billion by next year. The company's electrification segment, which deals with grid equipment, transformers, and other components. It booked more data center orders in the first quarter than it did in all of 2025. Their turbine production. It's essentially sold out for almost a decade into the future. I push back on Jon a little bit that yes, the valuation has outgrown the business, but there's a lot, especially all the things that I just mentioned that aren't really showing up in the numbers quite yet.

On the other hand, this is an expensive stock, even if you consider that backlog, the growing order book, the bull case essentially assumes that the demand cycle we're seeing is going to last for years into the future. The reality is there are physical constraints on their ability to fully capitalize on that demand. My bottom line on Vernova is that the demand is clearly there to justify today's pricing. The company has more orders than it can physically build for many years, but that valuation only holds up if that demand holds up for the next decade or so, and there isn't any significant kind of breaks in that AI capex story anytime soon. Tyler, onto your deep thoughts.

Tyler Crowe: There was actually a reason I picked this one specifically, and the reason we did is because GE Vernova was actually a recent recommendation in the Hidden Gem service, and I wanted to get that out there. I did even clear it with marketing and say if we could say that on the free site, but I wanted to get that out there. Steven, you seem to be in tune with what we're thinking here. Normally, of the three of us, I would probably be the most homogeny with valuation, but I'm going to make the case to you guys that even when you look at this valuation today, looking at the energy space in general, this is probably one of the companies actually worth paying up for.

Let me get into why. You were talking about its backlog of equipment and orders that it has for new turbines, because it makes turbines for every type of power. It's natural gas turbines, hydroelectric turbines, coal turbines, nuclear power, anything that runs a turbine for electricity, GE makes it, and there's three companies in the world that make up two-thirds of the market for this. It's them, it's Siemens and Mitsubishi. Here is the most interesting aspect of their business. They don't make a lot of money selling the actual turbine. It's maybe high single digits, maybe 10% margin. When they're lucky on these engines, it's not much. The actual money is made servicing aftermarket parts and service for decades after the actual turbine is sold.

When you have these really high periods of engine orders, it actually has some of the lowest margins in its business because its aftermarkets parts and service business is nearly triple the margins that they get for equipment orders. Right now, it's arguably at one of its lowest margin points in its period because as it builds out that fleet of turbines that it's going to be putting in every single piece of power equipment out there, those long-term orders of aftermarket sales, servicing, checking in on the things, maintenance, and stuff like that. That's going to be much higher margin, much higher return business that lasts for decades after that thing is actually installed. Not only do we have a decade runway of orders coming in, you have a decade of fleet build-out.

Right now, there's about 400 gigawatts of GE Vernova turbines powering something in the world right now, and they're expecting over the next five to seven years to put 200 gigawatts of additional power out there. They're almost adding 50% to their fleet, and that's going to give that long term service sales aftermarket business. When I look at GE Vernova, of all the businesses out there that I want to pay up for, I want to pay up for this one because I have so much more visibility into the long-term aspects of the business relative to some of the other one-time sales that you might have with the infrastructure build out with electrification.

Jon Quast: Tyler, I listen to you talk. The first thing I ask myself is where were you when I needed you two years ago? But the second thing I ask is you're saying all this, but you don't own the stock today, so what would actually get you off the sidelines and into the buyer’s arena?

Tyler Crowe: Well, one, Motley Fool trading restrictions says that I can't buy it right now. We'll start with that. But this has been a candidate for me for a little while. To your point about two years ago, it was funny when they spun GE Vernova out. It actually looked like the problem child of the three companies. I think we talked about this with the Honeywell spin-offs a couple of days ago where it's like they had all these bad servicing contracts with wind and all these other things. Everyone thought that GE Healthcare was going to be the gem that threw off all this cash and was going to reward investors, and lo and behold, Vernova has become the true champion here. I don't own it. Probably, I should throw my hand up and say guilty as charged, but perhaps once the trading restrictions that we have now that I've talked about it, I can't trade or buy it for a few more days. But certainly it’s something I'm going to be putting on my radar this coming time soon. Coming up next, we're going to get another listener question going into the real estate investment trust.

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Tyler Crowe: We don't normally do two questions or listener questions in any given show, but we had to do two this time because we actually got a question specifically for one of our guests on the podcast, and we had a question come in from Bruce Clark, who asked specifically for Matt's opinions on something. Here we go. Matt, question about American Tower, AMT is the ticker. The question is, "Is the debt manageable and will satellite technology erode the land-based tower business?" Yes, just for some context for people who may not know, American Tower is a real estate investment trust that specializes in owning the towers that companies like Verizon, T-Mobile, AT&T all of their communications equipment on. Basically, it's the landlord for the telecommunications network. With that slight introduction and because we need to feature Matt in this whole section, Matt, what do you got?

Matt Frankel: Well, first American Tower, to add to your company description, their name is misleading because they are not just American. They are literally all over the world. They have towers all over the place, and their chief rival, Crown Castle International, is only in America. I've always argued they should swap names. Bruce is right, their debt is elevated. A debt-to-EBITDA ratio of 4.9 is on the high end for a REIT. They have 4X interest coverage, meaning that their earnings before interest and taxes are roughly four times what they're spending on interest on their debt. That's comfortable but not ideal.

The company, they've done a solid job of extending their debt maturities at favorable interest rates, but the debt pay-down hasn't been as much of a priority as I feel it should have. For example, they just raised their dividend by 5%. They've been buying back stock, which is rare for a REIT. While I get it, the stock is cheap on paper, as I'll talk about in a minute. I feel like de-leveraging would be a somewhat better use of their money. I'm not worried about the debt in the sense that it's any real existential threat to the company, but I would love to see somewhat of a shift in capital allocation over the next couple of years.

Jon Quast: It's hard for me to imagine that we would see much of a shift, though. Because a lot of those capital allocation priorities, they're hard to move around too much. As a REIT, we pay out 90% of the taxable income. But then there's also expectations from investors that we are going to raise our dividend on a regular cadence and not change where we're putting that money. I was just looking at this. American Tower paying over $1 billion in interest payments annually and roughly $3 billion in dividend payments annually. Wouldn't you say that high debt load does impact the ability to raise the dividend? I know that there is some flexibility, but I don't know, at a 4% yield, that's good, but not necessarily great for a REIT. Wouldn't you say there are probably better options out there with lower leverage?

Matt Frankel: I would agree. That's one of the reasons I don't own the stock directly. I have plenty of exposure through ETFs because it's one of the biggest REITs in the market. But yeah, I would say there are better options with a lower leverage if you're just looking for a 4% yield from your investment with some upside. But you're right the debt load, it does constrain them on how much they can raise their dividend. There's a lot to unpack with the 90% of taxable income they have to pay out. That's for a whole other show. But yeah, there are some better options if you want a lower leverage REIT with a high dividend yield.

Tyler Crowe: I want to hit on the second part of the question, too, because I think it touches with a lot of what we've been talking AI and space and all that stuff because there has been this new concept of going out there. It's like, well, we're just going to put data centers in space and we're going to put satellite communications in space and we're going to render a lot of land-based communication data centers is useless. This really is American Tower's business. To the second part do you see those endeavors, satellite communication disrupting land-based telecoms or data centers in space? Is that going to basically upend American Tower here, or do they still have some legs?

Matt Frankel: The satellite direct-to-cell ambitions. You see companies like Starlink, like AST Space Mobile. It's a threat that's worth watching, but there are some physical constraints with what they're trying to do, essentially be an emergency backup. If you have your cell phone and you go into an area that doesn't have cell coverage, it would kick over to the satellite. Just for example, the direct-to-cell satellites that exist today anyway are not very good at providing coverage when you're indoors. That's a big obstacle to overcome. Because of things like that, for at least the next few years, this is likely to be a complement, not a replacement to these dense tower networks like American Tower operates. It's worth watching, but for the foreseeable future, I'm not worried about it.

Jon Quast: The only thing that I'd add here is that everything that Matt said can be true, and yet there can still be a huge greenfield opportunity for the direct-to-cell satellite companies simply because there are areas where an American tower or other cellular service land-based is not available. You think about remote areas of the USA, that's one thing, but internationally, there's just not the infrastructure in many countries that we enjoy in this country or even in many developed Western countries. There are plenty of places where it's not a competing product. It's wide open to whoever can get the coverage there, and in many cases, the most obvious path would be a satellite communication. The satellite communication companies can grow substantially without even infringing on the existing land-based turf.

Tyler Crowe: I think I mentioned this when we were doing our show about the SpaceX S-1 of when I lived in West Africa for a while, I tried to sign up for Starlink because, you know, the land-based options were relatively limited. To this point, I don't think that it's going to disrupt a lot of the existing systems that American Tower has because that's infrastructure there. It's pretty cheap. But the growth levers that the company has been pulling in international markets, it does have a very large presence in Africa. It could limit that if satellite communications now start to really drop in prices and make it comparable for places like that. I'm guessing by everyone's assessments here, it's like, it's a decent business. It pays an OK dividend. Probably overleveraged with some long-term threats that maybe it’s fine, but maybe not the best investment out there today. Fair assessment, guys?

Matt Frankel: Yeah. There's a lot to like about American Tower right now. The core tower business is performing better than expected recently. In the first quarter, revenue was up 7%. Earnings were above expectations. The company owns the core site data center business, so this is not just a tower REIT. They actually made one of the big data center acquisitions of the past few years, and that's growing at a double-digit pace for obvious AI reasons. The stock trades at 15 times funds from operations, which is essentially the REIT version of earnings. Pretty cheap, 4% dividend yield, as we've talked about a minute ago. Historically, that's very cheap for this company. I am not a shareholder, and I probably won't be, but really for the same reason I don't own Nvidia. It's because I have a ton of exposure through the S&P 500 index funds I own, because it makes up like 7% or 8% of them. It's the same thing with American Tower with the real estate index funds I own. Not going to be a shareholder myself, but there's a lot to like about the stock.

Jon Quast: For me, American Tower isn't on my radar for a different reason, and that's that I usually don't go for REIT stocks, and I normally don't go for anything commercial real estate, just not my thing. Especially when I consider why would I potentially want to invest in American Tower? It would be for the dividend. At 4% I can pick a different stock that I understand better and like better, and that makes a lot more sense to me. One in my portfolio now for its dividend would be Pepsi. I just think that Pepsi is a rock-solid business. I don't think it's going anywhere, even with some current doubts, I guess, from the investor community. I think that its business is going to exist for my lifetime, and it pays a comparable dividend. A business I understand better, like better and paying the same dividend. For me, that makes more sense than investing in something I don't really know.

Tyler Crowe: We'll go with a lukewarm. It's OK, but maybe take a look at Pepsi instead.

As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content provided for informational purposes only. To see our advertising disclosure, please check out our show notes. Thanks for producer Dan Boyd and the rest of the Motley Fool team. For Matt, Jon, and myself, thanks for listening, and we'll chat again soon.

Posted by Defense World Staff on Jul 19th, 2026

Empirical Financial Services LLC d.b.a. Empirical Wealth Management lowered its holdings in Meta Platforms, Inc. (NASDAQ:META – Free Report) by 1.0% during the first quarter, according to the company in its most recent Form 13F filing with the SEC. The institutional investor owned 105,894 shares of the social networking company’s stock after selling 1,048 shares during the quarter. Meta Platforms comprises about 1.0% of Empirical Financial Services LLC d.b.a. Empirical Wealth Management’s investment portfolio, making the stock its 19th largest position. Empirical Financial Services LLC d.b.a. Empirical Wealth Management’s holdings in Meta Platforms were worth $60,585,000 at the end of the most recent quarter.

Other hedge funds and other institutional investors also recently made changes to their positions in the company. RHL Group LLC bought a new position in shares of Meta Platforms in the fourth quarter worth about $28,000. Strategic Wealth Advisors LLC acquired a new position in Meta Platforms during the 4th quarter worth $29,000. Niles Investment Management LLC acquired a new stake in shares of Meta Platforms in the 4th quarter valued at $29,000. Bayban lifted its stake in shares of Meta Platforms by 100.0% during the first quarter. Bayban now owns 70 shares of the social networking company’s stock valued at $40,000 after acquiring an additional 35 shares during the period. Finally, Safe Harbor Fiduciary LLC acquired a new stake in Meta Platforms in the fourth quarter worth about $42,000. 79.91% of the stock is currently owned by institutional investors and hedge funds.

Meta Platforms Price Performance Shares of META stock opened at $646.01 on Friday. Meta Platforms, Inc. has a 12-month low of $520.26 and a 12-month high of $796.25. The firm has a market capitalization of $1.63 trillion, a price-to-earnings ratio of 23.48, a price-to-earnings-growth ratio of 1.14 and a beta of 1.25. The company has a quick ratio of 2.35, a current ratio of 2.35 and a debt-to-equity ratio of 0.24. The firm has a fifty day moving average of $603.17 and a 200-day moving average of $627.00.

Meta Platforms (NASDAQ:META – Get Free Report) last posted its earnings results on Wednesday, April 29th. The social networking company reported $10.44 earnings per share for the quarter, topping the consensus estimate of $6.67 by $3.77. Meta Platforms had a return on equity of 36.93% and a net margin of 32.84%.The firm had revenue of $56.31 billion for the quarter, compared to analyst estimates of $55.56 billion. During the same period in the previous year, the company posted $6.43 earnings per share. The company’s revenue for the quarter was up 33.1% on a year-over-year basis. On average, equities research analysts forecast that Meta Platforms, Inc. will post 29.46 earnings per share for the current year.

Meta Platforms Dividend Announcement The firm also recently announced a quarterly dividend, which was paid on Thursday, June 25th. Investors of record on Monday, June 15th were paid a dividend of $0.525 per share. This represents a $2.10 dividend on an annualized basis and a yield of 0.3%. The ex-dividend date of this dividend was Monday, June 15th. Meta Platforms’s dividend payout ratio is presently 7.63%.

Wall Street Analysts Forecast Growth Several brokerages have recently commented on META. Bank of America lowered their price target on shares of Meta Platforms from $885.00 to $820.00 and set a “buy” rating for the company in a research report on Monday, April 20th. Wells Fargo & Company upped their target price on shares of Meta Platforms from $765.00 to $767.00 and gave the company an “overweight” rating in a research report on Thursday, July 2nd. Benchmark started coverage on Meta Platforms in a research note on Tuesday, June 2nd. They issued a “buy” rating on the stock. Arete Research set a $735.00 price target on Meta Platforms and gave the stock a “buy” rating in a research report on Tuesday, June 2nd. Finally, Morgan Stanley dropped their price objective on Meta Platforms from $825.00 to $775.00 and set an “overweight” rating for the company in a report on Monday, March 30th. Three equities research analysts have rated the stock with a Strong Buy rating, thirty-six have given a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus target price of $830.45.

Check Out Our Latest Report on META

Insiders Place Their Bets In related news, insider Curtis J. Mahoney sold 2,079 shares of the business’s stock in a transaction on Wednesday, May 27th. The shares were sold at an average price of $609.92, for a total value of $1,268,023.68. Following the sale, the insider directly owned 1,118 shares of the company’s stock, valued at approximately $681,890.56. The trade was a 65.03% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Robert M. Kimmitt sold 500 shares of the company’s stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $607.75, for a total transaction of $303,875.00. Following the completion of the transaction, the director directly owned 3,443 shares of the company’s stock, valued at approximately $2,092,483.25. The trade was a 12.68% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 39,503 shares of company stock worth $24,241,859. Company insiders own 13.53% of the company’s stock.

More Meta Platforms News Here are the key news stories impacting Meta Platforms this week:

Positive Sentiment: Meta is reportedly in early talks to lease computing power to Anthropic in a potential deal worth up to $10 billion. Investors view that as a possible new revenue stream that would help Meta monetize its AI infrastructure and validate demand for its computing capacity. Article Title Positive Sentiment: Meta also unveiled its newest AI model, Muse Spark 1.1, and the company is reportedly considering a broader cloud push. Together, those moves reinforce the idea that Meta can turn heavy AI spending into products and services that generate returns. Article Title Positive Sentiment: Analysts remain constructive on Meta’s earnings outlook, with Erste Group raising its FY2027 EPS estimate and maintaining a Buy rating. That adds to the bullish case heading into the next earnings report. Article Title Neutral Sentiment: A federal judge declined to block Meta from laying off workers who filed an AI discrimination lawsuit. The ruling removes an immediate legal obstacle, but the underlying claims over alleged bias in AI-driven job cuts still create headline risk. Article Title Negative Sentiment: Meta is also facing scrutiny from employees over AI-assisted layoffs, with allegations that its tools discriminated against protected groups. That could keep legal and reputational pressure on the stock. Article Title Meta Platforms Company Profile (Free Report)

Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.

Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.

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We all know Meta Platforms (META 2.79%) as the ubiquitous social networking ecosystem. Investors are also familiar with its booming digital advertising platform. But there's something else that's moving the needle these days.

As of July 16, Meta shares are up 21% this month. This stellar performance is better than all the other Magnificent Seven stocks. It's a notable reversal from June, when shares dipped 11%.

Here is what's driving the surge that has added a whopping $270 billion to the company's market capitalization in July.

Image source: The Motley Fool.

The market likes the company's new AI strategy Like its hyperscaler peers, Meta is sparing no expense when it comes to artificial intelligence (AI). Capital expenditures will be between $125 billion and $145 billion this year, according to company estimates. It's time to start monetizing this spending.

On July 1, Bloomberg reported that the company is building a cloud computing division under the Meta Compute initiative. It plans to sell its unused compute resources and/or host AI models that developers can use. This is an admission that the business has been spending too aggressively on AI infrastructure. It appears to have more capacity than it knows what to do with.

Founder and CEO Mark Zuckerberg understands that computing capacity might be the hottest commodity on the planet right now, and his company has access to this vital resource. If Meta can earn a better return selling this to outside customers as opposed to using it for its own operations, then it's a no-brainer decision.

Investors will appreciate the urgency to try to generate revenue soon. This is extremely relevant today, as Meta's first-quarter capex total of $19.8 billion amounted to a sizable 61% of its operating cash flow during the period.

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Improving sentiment, but still a lot to prove At the end of June, Meta shares traded at a price-to-earnings ratio of 20.5. Today, they trade at a multiple of 24.4. Market sentiment was certainly lower, but it has now improved, showcasing investor enthusiasm.

This also reveals that the market has higher expectations. All eyes continue to be on AI. Meta shareholders should listen to any commentary the management team provides on its new cloud venture, especially related to operational timelines and expected financial performance.

This relates to the bigger topic. The business will probably need to start providing more color on the overall returns it believes it can generate from its massive AI capex plans. Otherwise, the market will start to get jittery. This is the single most important variable to pay attention to, because it can tell investors whether Meta is spending with an eye on the potential payoff.

CEO Mark Zuckerberg is focused on turning Meta Platforms (META 2.79%) into a leader in artificial intelligence (AI). An internal memo revealed plans to move Iris, its custom data center AI chip, into production in September, and to double the company's data center capacity to 14 gigawatts in 2027.

This is significant for investors because Meta's stock is not currently valued like an AI leader. It trades at a forward price-to-earnings multiple of 21, a discount compared with most of the other "Magnificent Seven" stocks, which largely trade at multiples of around 25 or higher. If Meta succeeds at turning its heavy capital spending into more profitable growth, the market could re-rate the stock to a level more in line with its peers.

Image source: The Motley Fool.

Zuckerberg sees a strategic advantage Earlier this year, Meta CFO Susan Li acknowledged that data center capacity planned 12 to 36 months ago is no longer sufficient. New data center construction requires a multiyear lead time, even as the demand for AI processing power continues to grow. This is creating a bottleneck in the technology's growth.

For Meta, resolving that issue is particularly important. Its social media platforms have over 3.5 billion daily active users, but AI is now a central part of how it monetizes them. The company is leaning heavily on AI to fine-tune its advertising business, which generates the bulk of the company's revenue.

"One of the primary goals of our Meta Compute initiative is to lead the industry in efficiency of building compute, and we expect that will be a strategic advantage over time," Zuckerberg said during the company's first-quarter earnings call.

Meta partnered with Broadcom to design its custom Iris chip, which will be manufactured by Taiwan Semiconductor Manufacturing. This application-specific integrated circuit (ASIC) will ultimately help Meta to lower its AI computing costs and tailor its compute resources to its own use cases, including improving recommendation systems and advertising performance across its social media apps. AI has already had a massive impact on Meta's financials, helping drive revenue up 33% year over year in the first quarter.

What this means for the stock The stock has underperformed year to date, reflecting Wall Street's skepticism about Meta's ability to deliver a satisfactory return on investment from its heavy capital spending. The company has said it plans to spend up to $145 billion on capital expenditures this year. Those outlays will put pressure on its near-term earnings. The Motley Fool's research shows that the top four hyperscalers -- Meta, Microsoft, Amazon, and Alphabet -- plan to spend between $600 billion and $700 billion on capex in 2026.

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Still, Meta has already seen significant improvement in its ad performance with AI. Investors should expect further investment in custom chips and additional compute capacity to yield even greater returns over time.

These investments are not just about boosting ad performance. It's also laying the groundwork for new products, including AI agents for personal and business use.

Meta has the highest gross margin of any Magnificent Seven company. Its $124 billion in trailing cash flow from operations is a strategic advantage, helping fund its AI initiatives. This reflects the profitability of its ad business and explains why the stock should be re-rated to a higher valuation.

John Ballard has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Meta Platforms, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Meta Platforms (META 2.79%) is a $1.7 trillion company. Its family of apps counts 3.56 billion daily active users. And it arguably benefits from the most powerful network effects on the face of the planet. All signs point to it being an elite business.

However, there are deep questions about how it will fare in the coming years. That's because it's also a hyperscaler, and forecasts it will spend $125 billion to $145 billion on AI data center capital expenditures in 2026 alone. Analysts expect even bigger outlays from it in 2027.

But whether there will be a profitable payoff on these colossal expenditures is a huge point of uncertainty.

Here's what Meta shareholders should be thinking about.

Image source: Getty Images.

There's no clear line of sight On Meta's first-quarter earnings call, an analyst asked founder and CEO Mark Zuckerberg what the return on invested capital would be over the coming 12 to 24 months from its AI-related spending spree.

"That's a very technical question," the tech mogul replied, and went on to explain that the company's philosophy rests on building great products and experiences first, then scaling and monetizing them afterward.

It's understandable if Meta bulls want to give its management team the benefit of the doubt. This is one of the world's most dominant and successful companies. Investors could be forgiven for trusting Zuckerberg's capital allocation decisions.

On the other hand, this is an unprecedented level of spending. Analysts' consensus view is that Meta will report $145 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2026. Its capex plans will soak up nearly all of that.

Spending on that scale should be paired with the ability to give investors a more insightful response about expected ROI than the one Zuckerberg gave on the most recent earnings call. Investors would have more confidence in the company's direction if they had some insight into what metrics management is tracking to gauge the success of its AI spending spree, or timelines for when to expect adequate returns.

Meta Platforms

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It's getting cloudy Because virtually all of Meta's revenue comes from ad sales, an obvious reason for all this spending would be to bolster its digital advertising capabilities through better targeting and monetization techniques, and to improve user engagement. This segment is firing on all cylinders, with sales soaring 33% year over year in the first quarter.

Meta's latest move, however, indicates it has overbuilt capacity and is spending too much. As part of the Meta Compute initiative, the company recently announced it is forming a new cloud segment to lease excess compute resources to external customers. The good news is that this can generate revenue quickly, as data center demand globally is substantially outstripping supply.

However, investors should still be more critical of Meta than they have been, as hundreds of billions of dollars are now at stake.

Anthropic is in very preliminary talks to lease computing power from Meta, a person familiar with the matter told CNBC's Kate Rooney.

Shares of the social media giant climbed off their lows of the day Friday following a report from the New York Times that a potential deal was being discussed worth about $10 billion.

The talks come weeks after Anthropic announced a similar deal with Elon Musk's SpaceX to use the computing capacity at its Colossus 1 data center to improve capacity for paid subscribers.

They are a sign that Anthropic, one of the leading artificial intelligence labs, continues to make big commitments with other AI labs to use their access to AI chips made by Nvidia.

Access to enough AI chips remains a challenge for firms like Anthropic, which places usage limits on its most advanced models like Fable.

The talks also come after Meta CEO Mark Zuckerberg said in May that the social media company was considering entering the cloud computing business, in an effort to show investors that the firm can make money from AI investments beyond improvements to its current business. Dave Brown, a former senior executive at Amazon Web Services, is set to join Meta, CNBC has confirmed.

Meta could spend as much as $145 billion on capital expenditures, including for AI infrastructure, in 2026.

Last October, Zuckerberg said that companies are regularly "asking if we have compute that they could buy from us at some premium to what we've bought it at."

Meta declined to comment.

Read more CNBC tech newsElon Musk's Memphis AI empire is the epicenter of the data center backlashChinese startup Moonshot AI unveils Kimi model it says rivals OpenAI, AnthropicSpaceX stock falls after Starship test flight abortedMicrosoft's Nadella criticizes Anthropic's Fable for being 'editorially controlled'

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Nasdaq Struggles As Memory Names Plunge Further; Netflix Sells Off Late On Soft Outlook

Nasdaq Breaks Support As Chip Sell-Off Deepens; Knight-Swift, Canadian Pacific, AbbVie In Focus Meta Platforms (META) is reportedly in early talks to lease computing power to Anthropic, the startup behind the Claude AI chatbot. Meta stock traded lower Friday but trimmed losses following the news. The deal that could be worth as much as $10 billion over two years, according to a report by The New York Times Friday afternoon. The talks remains…

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