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Avanda Investment Management Pte. Ltd. purchased a new stake in Meta Platforms, Inc. (NASDAQ:META – Free Report) during the 1st quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The firm purchased 2,280 shares of the social networking company’s stock, valued at approximately $1,304,000. Meta Platforms comprises approximately 2.1% of Avanda Investment Management Pte. Ltd.’s investment portfolio, making the stock its 17th largest holding.

A number of other institutional investors also recently modified their holdings of the business. Vanguard Group Inc. increased its position in Meta Platforms by 3.8% during the 4th quarter. Vanguard Group Inc. now owns 199,995,630 shares of the social networking company’s stock worth $132,015,115,000 after purchasing an additional 7,269,279 shares in the last quarter. Auto Owners Insurance Co lifted its stake in Meta Platforms by 76,587.7% in the 4th quarter. Auto Owners Insurance Co now owns 105,292,277 shares of the social networking company’s stock valued at $69,502,379,000 after purchasing an additional 105,154,977 shares during the last quarter. State Street Corp boosted its position in Meta Platforms by 5.1% in the fourth quarter. State Street Corp now owns 90,841,345 shares of the social networking company’s stock valued at $59,963,463,000 after buying an additional 4,395,763 shares in the last quarter. Geode Capital Management LLC boosted its position in Meta Platforms by 1.7% in the fourth quarter. Geode Capital Management LLC now owns 52,806,712 shares of the social networking company’s stock valued at $34,734,628,000 after buying an additional 878,396 shares in the last quarter. Finally, Capital World Investors boosted its position in Meta Platforms by 0.8% in the fourth quarter. Capital World Investors now owns 39,558,637 shares of the social networking company’s stock valued at $26,112,735,000 after buying an additional 310,947 shares in the last quarter. Institutional investors and hedge funds own 79.91% of the company’s stock.

Analyst Ratings Changes META has been the subject of several research analyst reports. Wall Street Zen downgraded shares of Meta Platforms from a “buy” rating to a “hold” rating in a report on Saturday, May 16th. Piper Sandler began coverage on Meta Platforms in a research note on Tuesday, June 2nd. They issued an “overweight” rating for the company. JPMorgan Chase & Co. reissued a “neutral” rating and set a $725.00 price objective (down from $825.00) on shares of Meta Platforms in a report on Thursday, April 30th. Rosenblatt Securities restated a “buy” rating and set a $1,015.00 price objective on shares of Meta Platforms in a research report on Thursday, May 28th. Finally, Mizuho lowered their target price on Meta Platforms from $850.00 to $835.00 and set an “outperform” rating for the company in a report on Tuesday, May 5th. Three analysts have rated the stock with a Strong Buy rating, thirty-six have assigned a Buy rating, eight have given a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus target price of $830.45.

Check Out Our Latest Stock Analysis on META

Meta Platforms Price Performance Shares of NASDAQ:META opened at $645.85 on Tuesday. The firm has a market cap 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. The firm’s fifty day moving average is $604.11 and its 200-day moving average is $626.63. The company has a debt-to-equity ratio of 0.24, a quick ratio of 2.35 and a current ratio of 2.35. Meta Platforms, Inc. has a 52 week low of $520.26 and a 52 week high of $796.25.

Meta Platforms (NASDAQ:META – Get Free Report) last issued its quarterly earnings data 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 company had revenue of $56.31 billion for the quarter, compared to analysts’ expectations of $55.56 billion. Meta Platforms had a net margin of 32.84% and a return on equity of 36.93%. Meta Platforms’s revenue for the quarter was up 33.1% on a year-over-year basis. During the same quarter in the previous year, the firm posted $6.43 earnings per share. Sell-side analysts predict that Meta Platforms, Inc. will post 29.46 earnings per share for the current year.

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

Insider Activity at Meta Platforms In other news, COO Javier Olivan sold 3,348 shares of the business’s stock in a transaction that occurred on 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 transaction, the chief operating officer owned 9,498 shares in the company, valued at approximately $5,708,013.06. The trade was a 26.06% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. 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 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 completion of the sale, the insider directly owned 1,118 shares in the company, valued at approximately $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 have sold 37,948 shares of company stock worth $23,184,319 over the last ninety days. Insiders own 13.53% of the company’s stock.

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 Meta Platforms 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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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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SummaryCompaniesJury selection begins Monday in Nashville for a seven-week trialTennessee seeks penalties and an order requiring Instagram platform changesA New Mexico jury awarded that state $375 million in damages earlier this yearJuly 20 (Reuters) - Meta Platforms (META.O), opens new tab faces trial in Tennessee on Monday over the state's claims that Instagram's design is to blame for a youth mental-health ​crisis, one of several trials in the coming weeks testing allegations that the company's social media platforms were intentionally built to be addictive.

Tennessee accuses ‌the company of violating the state's consumer protection law by knowingly designing a product that drives teens to compulsive use and misleading the public about its safety.

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The lawsuit, filed by Attorney General Jonathan Skrmetti's office, claims Meta failed to disclose extensive internal research showing Instagram could harm teens and continued offering features it knew were dangerous without warning users.

The state alleges founder and CEO Mark Zuckerberg was repeatedly ​warned by some Meta employees about research that found a negative impact on teens, but declined to fund efforts to minimize those harms and made misleading ​public statements about the amount of harmful content on the platforms.

Skrmetti is seeking financial penalties and a court order directing Instagram to ⁠modify aspects of the platform that the state says are harmful to teens' mental health. The case focuses on features like autoplay, Instagram's Reels videos, notifications and designs ​that cause content to disappear after a certain period.

A Meta spokesperson said in a statement on Friday that the company already has built-in controls to protect the hundreds of thousands ​of Tennessee teens who use social media every day.

"We want them to do that in a protected space, which is why we’ve spent a decade building safe, age-appropriate defaults for teens alongside simple tools for parents to set the right boundaries for their family," the spokesperson said.

The company has argued the state's claims of harm are based on the content posted on Instagram by its users, and ​that a federal law, Section 230 of the Communications Decency Act, shields the company from liability for third-party content.

OVERLAPPING TRIALSJury selection will begin in Nashville on Monday for the ​first phase of the trial. The jury will decide whether Meta violated Tennessee law. If the jury finds it did, the case will move to a second phase where the judge will weigh ‌monetary penalties ⁠and potential changes to Instagram. Tennessee’s consumer protection law levies a fine of up to $1,000 per violation.

The trial, which is slated to last for seven weeks, is scheduled to overlap with at least two other trials against the company in courts in California as it faces thousands of lawsuits over similar claims in both state and federal court.

Nearly every state in the country has filed claims against Meta over its platforms’ alleged impact on children. A trial over claims against Meta brought by 29 states alleging the company violated ​federal law protecting data collected from children ​and additional state law claims from ⁠California, Colorado, Kentucky and New Jersey is scheduled to begin on August 18 in federal court in California.

Separately, Meta and other social media companies are facing thousands of lawsuits brought by individuals and school districts in both state and federal court.

A trial against Meta and ​Snapchat parent Snap Inc (SNAP.N), opens new tab over the claims brought by a 15-year-old boy from Florida known as R.K.C., who alleges that social media ​damaged his mental health, ⁠is scheduled to begin on July 27.

The companies have broadly denied the allegations in these lawsuits, arguing they have sought to protect children and should not be liable for claims they say are based on content posted by their users.

SECOND STATE TRIALTennessee’s trial is the second to test claims in a lawsuit brought by a state against Meta.

New Mexico’s lawsuit against the ⁠company went to ​trial earlier this year, and a jury found the company had misled consumers about the safety of ​its Facebook, Instagram and WhatsApp platforms. The jury awarded the state $375 million in damages.

The judge held a separate bench trial over New Mexico’s claim the company had created a public nuisance, and is currently weighing whether to ​order the company to make changes and direct it to pay additional damages to repair the harms.

Reporting by Diana Novak Jones in Chicago, Editing by Alexia Garamfalvi and Matthew Lewis

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

Diana reports on product liability, litigation, mass torts and the plaintiffs' bar. She previously worked at Law360 and the Chicago Sun-Times.

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.

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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© Kelly Sullivan / Stringer / Getty Images North America

Meta Platforms (NASDAQ:META | META Price Prediction) is spending like an infrastructure company and being valued like a growth company. With full-year 2026 capex guidance raised to $125 to $145 billion to build out AI data centers, the question is whether shareholders get paid back for that bet.

Our proprietary model says yes. The 24/7 Wall St. price target for Meta is $903.93, implying 32.67% upside from $681.31. Our recommendation is buy with high confidence.

24/7 Wall St. Price Target Summary Metric Value Current Price $681.31 24/7 Wall St. Price Target $903.93 Upside 32.67% Recommendation BUY Confidence Level 90% A Choppy Six Months, Then a Sharp Bid Back Meta has been a rollercoaster. Shares are up 12.96% in the past week and 14.8% over the past month, but only 3.39% year to date and down 3.78% over the past year. The stock sits 4% below its 52-week high of $793.65 after bouncing off a 52-week low of $519.78.

Q1 2026 was a blowout: EPS of $10.44 beat expectations of $6.66 on revenue of $56.31 billion, up 33.08% YoY. Ad impressions rose 19% and average price per ad rose 12%. The stock initially sold off to $608.75 a day after the earnings report as investors digested the raised capex line.

Why Bulls See a Breakout Ahead The bull case rests on Meta’s ability to convert AI compute into ad monetization. Family daily active people reached 3.56 billion, and Susan Li noted a 10% lift in Reels time spent on Instagram after Q1 ranking upgrades. Business AI conversations are running at more than 10 million weekly, up from 1 million at the start of the year.

Mark Zuckerberg said Meta is “on track to deliver personal superintelligence to billions of people.” Our bull scenario points to $1,033.70, a 51.72% return if Muse Spark and business agents scale on schedule.

What Could Go Wrong The bear case starts with capex intensity. Q1 capex hit $19 billion, up 46.8%, and Reality Labs still bled $4.03 billion. Insider activity is not encouraging: COO Javier Olivan has been selling weekly, with CFO Susan Li disposing of 9,195 shares on May 18, 2026 around $604 to $611.

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Bulls counter that these dispositions are largely scheduled RSU vestings rather than discretionary sales, and that the $8.03 billion tax benefit boosting Q1 EPS is a real cash item tied to CAMT R&D guidance. Our bear scenario lands at $773.09, a 13.47% return. Watch items include EU DMA pressure and 2026 youth-litigation trials.

How Meta Compares to Alphabet and Pinterest Alphabet (NASDAQ:GOOGL) is the cleanest comp because both are AI hyperscalers funding data-center builds from ad cash flow. Alphabet’s 2026 capex guide of $175 to $185 billion dwarfs Meta’s plan, and Google Cloud posted $20.03 billion in Q1 revenue, up 63% YoY. Alphabet trades near a similar forward multiple with a diversified cloud engine Meta lacks, making Meta’s forward P/E of 21x look reasonable rather than rich.

Pinterest (NYSE:PINS) offers a smaller-scale ad-platform contrast. Pinterest grew Q1 2026 revenue 17.8% to $1.01 billion with 631 million MAUs. Meta’s 33% ad revenue growth at vastly larger scale, plus 41.44% operating margins, makes our $903.93 target look conservative against the peer set.

Meta Price Prediction 2026-2030 The 24/7 Wall St. price target of $903.93 with 90% confidence lines up with 57 buy ratings against zero sells. The tipping factor is monetization velocity: ad pricing plus AI-driven engagement gains are already compounding.

The setup looks constructive if Q2 2026 revenue lands at the top of the $58 to $61 billion guide. The thesis weakens if capex creeps past $145 billion without a matching lift in operating income.

Year 24/7 Wall St. Price Target 2026 $903.93 2027 $1,050 2028 $1,210 2029 $1,370 2030 $1,522.85 These projections assume Meta scales ad revenue faster than data-center depreciation and Reality Labs losses stabilize. Meaningful upside or downside could come from AI regulation shifts or a Muse family model breakthrough.

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In a recent interview, Instagram head Adam Mosseri said he can see a time in the future, perhaps only a year or two, when putting limits on Meta employees’ AI token spend will become necessary.

“I think that you can imagine, at least in a year or two … that the burn rate of a strong engineer might be the same as their salary, or their cost of employment. And in that world, you’re going to probably need to put in some caps,” the Meta executive said, while speaking on Lenny’s Podcast.

AI token spend, a reference to the cost of processing AI prompts and responses, has been a much-buzzed-about subject in recent days. Meta shut down an internal AI token spend leaderboard after AI costs put the company on track for billions of dollars in 2026.

Meta is not alone in rethinking its approach to AI experimentation. Uber also had an AI reckoning after it blew through its 2026 AI coding budget by April. Soaring token costs saw Microsoft cancel Claude Code licenses, consolidating its engineers around its own Copilot CLI tool instead.

Mosseri’s belief, he explained, is that AI token costs will have to be managed just like any other resource, offering an analogy to things like payroll or operating expenditure (OpEx), which is the day-to-day costs of running a business.

“I think of it like…any other resource,” Mosseri said. “I have to decide how to deploy capacity to my different teams because I have a limited number of GPUs and CPUs and storage and RAM etc. I have to decide how to deploy OpEx for labeling budgets across my teams. I have to decide how to deploy payroll for headcount across my teams.”

Token budgets will be the same, he added, noting that the cap per engineer would have to be proportional to the company’s trust in their ability to use the budget in an “ROI-positive” way.

Meta doesn’t currently have token caps for any employee, Mosseri said, but he believes that their use could be healthy in the future. Further down the road, he expects token costs to come down as the AI model makers enter a pricing war to attract people to use their tools over their competitors.

For now, the company has managed to rein in its token costs a bit by shutting down the “silly things” that it was doing, Mosseri noted — like that token spend leaderboard.

“It’s not that hard to build a token incinerator, and that doesn’t create a lot of value,” he said.

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Sarah has worked as a reporter for TechCrunch since August 2011. She joined the company after having previously spent over three years at ReadWriteWeb. Prior to her work as a reporter, Sarah worked in I.T. across a number of industries, including banking, retail and software.

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Jim Cramer says a single AI product decision at Meta Platforms (NASDAQ:META | META Price Prediction) just moved the stock roughly $100 per share, and he is using it as Exhibit A for why big tech is nearly impossible to trim.

In his Sunday column, Cramer wrote that on the June 30 episode of Mad Money he argued a cloud business announcement from Meta would be “worth an easy 100 points, or $100 per share, for the stock,” back when shares closed at $563. Ten trading days later, they closed at $669.21.

That is a 14.81% move in a single week and a 17.31% move in a month on a company with a $1.7 trillion market cap. Cramer’s takeaway, published on CNBC: “By a simple stroke of a pen, Meta gives you 100 points, or almost 20%.”

The Catalyst Cramer Called The specific event was Meta signaling it would rent out excess AI compute. Zuckerberg told Bloomberg last week that “the offers that you get for using the compute are so high that it may make sense, in some cases, to rent out or consider those kind of deals instead of your own internal uses.” Meta jumped 5.97% on Friday, July 10, closing at $669.21.

The compute-monetization pivot lands on top of Meta Superintelligence Labs, the new AI research entity Zuckerberg introduced on the Q1 2026 call. He described it as a “milestone quarter” that included “the release of our first model from Meta Superintelligence Labs” and reiterated the goal of “personal superintelligence to billions of people.”

The Numbers Under the Rally Meta’s Q1 2026 report, filed with the SEC on April 29, showed revenue of $56.31 billion, up 33.08% year over year, and EPS of $10.44 against a $6.66 estimate. The advertising engine grew 33%, with ad impressions +19% and average price per ad +12%. Family daily active people reached 3.56 billion.

The catch: capex. Meta raised full-year 2026 capital expenditure guidance to $125–145 billion, up from a prior $115–135 billion range. Q1 capex alone hit $19 billion. Cramer’s argument is that the compute-rental pivot changes how investors should think about that spend, because dormant infrastructure suddenly becomes a revenue line rather than a capex sinkhole.

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.

Debt Versus AI Payback The bear case Cramer is answering is leverage. Total debt has climbed from $13.87 billion at year-end 2021 to $86.77 billion at the end of Q1 2026. Capital lease obligations tied to AI data centers doubled to $28.02 billion. Debt-to-equity has moved from 0.111 to 0.356.

The offset is cash generation. Retained earnings reached $144.65 billion. Operating cash flow in Q1 was $32.23 billion. Liquid assets total $51.84 billion, and the current ratio sits at 2.35x.

Investors sorting the AI winners from the also-rans may find useful context in our 7 Stocks Powering the AI Boom (That Aren’t Chipmakers) report, which frames why hyperscalers with in-house monetization paths get valued differently than pure infrastructure plays.

What to Watch Next At 24x trailing earnings and 19x forward, Meta is not cheap on a growth-adjusted basis, but the analyst consensus target of $828.34 implies room above current levels, backed by 49 Buy and 8 Strong Buy ratings against zero Sell calls. Q2 revenue guidance is $58–61 billion.

Prediction markets are notably split on tempo. Polymarket traders assign a 64.5% probability that shares finish today lower, yet give Meta an 80.5% chance of ending 2026 with a higher valuation than OpenAI. That is the exact tension Cramer’s column captures: near-term digestion is possible, but the AI optionality is the reason he says these names are so hard to leave.

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.

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Meta is pushing advertisers to use its AI tools — and results are proving chaotic: strangely twisted limbs, gibberish writing, or entirely changed products.

Meta's response to brands: That's on you, not us.

The tech giant has inserted a slew of AI features into its ad products in recent months. Working as designed, they can help make tweaks to ads that improve their likelihood of being clicked. But advertisers say the tools are clunky and generate misrepresentations and absurdities.

Business Insider spoke with eight advertisers and agency execs who said dealing with Meta AI problems had become routine.

Jessica Gleim, an ads consultant who works with female-founded brands, told Business Insider she regularly sees odd outcomes in Meta's AI creative recommendations for ads she's working on.

For one of her clients, a pajama brand, Meta recommended new assets that altered the actual product. The brand was promoting a pajama dress, and Meta suggested a new image with a shirt and pants. For another client, a networking group for women in Montana, Meta had a new vision for those ads: adding men.

Meta AI's suggested changes to a women's group ad included adding a man.  BI "It's not usable to help my clients grow their business," Gleim said.

While some of Meta's AI ad features are turned off by default, advertisers say they have been prone to bugs that accidentally turn them on. Karissa Tuccio, executive director of social and influencer at Mediassociates, said a bug that toggled AI settings on had regularly affected most of the 15 clients for whom she handles Meta advertising. She said she had flagged the bug to her Meta rep as recently as Thursday.

Meta's AI completely changed the product in this suggested ad tweak that Gleim encountered.  BI Outdoor retailer REI drew consumer backlash last month for running an Instagram ad depicting a nonsensical bike with two handlebars. REI said Meta had "auto-enrolled" it in an AI feature that spat out an "inaccurate" and "inappropriate" image.

A Meta spokesperson said that the company's terms of service state that "AI can make mistakes and that it is the advertiser's responsibility to review the AI outputs."

Advertisers' chief complaint about Meta's AI ad tools is simple: They feel they have to double-check all the AI features for each campaign to make sure nothing is inadvertently switched on or has gone haywire. With some advertisers and agencies running hundreds or thousands of ads at any given time, the extra steps required to wrangle the AI tools create more work.

REI's AI ad accident drew a big online backlash from customers.  BI "We somehow accepted that as a new standard operating procedure," said Rok Hladnik, CEO of the marketing agency Flat Circle, which manages around $200 million in annual Meta ad spending for numerous direct-to-consumer brands.

Brands and advertisers say that while AI failures can be an amusing talking point on the internet, they can pose real problems for a brand.

"When the AI starts generating weird creative or making unapproved changes, it can quietly damage brand perception — especially for anyone who cares about consistency," said Robert Webster, CEO of TAU Marketing, which manages around $500 million in annual ad spending across various platforms.

A Valentine's Day surpriseAround Valentine's Day, photographer and marketer Abigail Hogue was uploading an ad campaign to Meta. She works with a small business, Quite Literally Books, and had shot the creative assets for the holiday campaign with chocolates, macarons, candles, and books. Hogue was proud of the work she'd done.

"About 12 hours later, when everything was approved and started to run, I started getting some messages from friends and people that I knew and screenshots of some of these ads that were running, cheekily accusing me of AI slop," Hogue said.

The text on the products in the images was "garbled," and the "actual products look like knockoff iterations of themselves," she said.

Abigail Hogue was horrified at how Meta's AI altered her ad.  Quite Literally Books; BI When Hogue saw the AI ad, she went into a panic and edited the campaign in Meta's Ads Manager, turned off all AI creative enhancements, and then republished the ads.

She then spent hours in a back-and-forth with Meta customer service. Representatives told her it was a "sporadic" and "one-off occurrence," and also said it was a "glitch," according to screenshots of their exchange viewed by Business Insider. She requested a refund, and Meta acknowledged her request. Quite Literally Books said it hadn't received a refund as of Friday afternoon.

Other advertisers have told Business Insider about their strange Meta AI ads, ranging from an unrealistic granny in loungewear to a model whose leg appeared to be completely bent the wrong way.

Luke Jonas, chief growth officer of the marketing agency Nest Commerce, emphasized the importance of keeping a human in the loop when testing AI-generated ads.

"A machine optimizing for 6 million advertisers will occasionally give you two handlebars," Jonas said, referencing the REI ad.

While two advertisers said Meta appeared to have fixed a bug that was toggling AI settings on for their clients, Mediassociates' Tuccio said a similar issue persisted for her as of last week.

Tuccio said a Meta rep told her last week that Meta had developed a quality-control dashboard for big advertisers to ensure their ads don't go live with unwanted AI enhancements.

"She mentioned, 'If you guys have a big launch coming up, you can send me all the ad IDs, and we have an internal dash that will check to make sure all of the enhancements have been fully turned off,'" Tuccio said. "So that leads me to believe it has not been resolved."

'Meta's still the best platform'Starting last month, Meta began automatically applying an "AI info label" to ads when they use its AI tools — or third-party tools like Midjourney or Dall-E — to create or significantly edit their ads. To see it, users must click the three dots above an ad, select "about this ad," and then tap on "AI info." Google added labels last week to indicate whether ads were created or edited using AI.

Meta is also improving its AI image generation models. Last week, it began rolling out Muse Image, a model developed by its Superintelligence Labs, which can help advertisers develop their creative assets. (Following backlash, Meta on Friday removed a feature in Muse Image that let users generate AI images from other people's public Instagram posts, saying it "missed the mark.")

Still, advertisers say Meta's basic design encourages relinquishing control to the system, which can lead to disastrous results.

"The defaults are aggressive, the toggles are easy to miss, and the system is clearly designed to reduce friction so more money flows through the platform with less manual intervention," TAU's Webster said.

Meta says "millions of advertisers are finding value and improved performance using our Advantage+ creative tools to support ad creation." The Meta spokesperson added that the company's AI image generation tool, which creates variations based on a seed image provided by the advertiser, is turned off by default.

Meta isn't alone in automatically modifying advertisers' creative. Google's Performance Max and AI Max products also use AI to scrape ad copy from brand websites and automatically crop or shorten videos for placements such as YouTube Shorts. Some of these AI automation features are enabled by default, though Google has largely avoided the kind of high-profile issues Meta has seen.

Danny Weisman, cofounder of Obsessed Media, said the main complaint he's heard about Google from brands is that ads made with its AI tools could turn out looking "ugly."

"It's not like someone's hand is missing," he said.

Meta's ad business, which pulled in around $196 billion in revenue last year, remains essential to most brands' customer acquisition strategies. Its reach of 3.5 billion daily active users and highly sophisticated ad targeting platform make it difficult to quit, even if problems arise.

"That means it can make unpopular decisions that boost its own profits with near impunity, because most advertisers cannot realistically walk away," TAU's Webster said.

Then there's the simple truth: Meta ads generally get results.

"Meta's still the best platform," Gleim said. "It has the most robust options. It has the most data."

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Lara O'Reilly is the anchor of the CMO Insider newsletter.She is a senior correspondent who has covered the digital advertising, marketing, and media industries since 2010. Her current beat includes big tech companies like Alphabet, and Meta, and adtech firms, agencies,  publishers, the creator economy, and CMOs.Lara has previously worked as a reporter and executive producer at titles including The Wall Street Journal, Digiday, Yahoo Finance, and Marketing Week. She was previously Business Insider's senior global advertising editor from 2014 to 2017.Lara was named "Digital Journalist of the Year" by the London Press Club in 2016.Lara is a regular guest on TV and radio and has appeared on outlets such as the BBC, NPR, SiriusXM's Wharton Business Daily, and CTV Television Network. She also frequently speaks on stage at major events such as Web Summit, IFA, VivaTech, Advertising Week, and Cannes Lions.To get in touch with Lara O'Reilly, email [email protected] or contact her on Signal at @loreilly.71Check out Insider's source guide for tips on sharing information securely.Read some of Lara's recent work below:

Inside Amazon's plan to clobber rivals The Trade Desk and Google in a key area of advertisingMeet Cindy Rose, the former lawyer and top Microsoft exec set to become CEO of ad giant WPPHow X CEO Linda Yaccarino went from Elon Musk's fixer to out of a job in 2 yearsInside the political reckoning shaking up the ad industryMeet the 'reclusive' tech billionaire making an audacious bid to buy TikTokTop marketers are under a ton of pressure. They told me how they're trying to make themselves recession-proof.Big Tech workers got too used to perks. The pampering is over.

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Sydney Bradley has been covering media and tech for Business Insider since 2020. She breaks news and writes extensively about Instagram and Facebook, as well as new platforms and startups shaping social media, dating apps, the creator economy, venture capital, and tech culture.Sydney's reporting on Instagram was nominated as a finalist for the 2021 Los Angeles Press Club National Entertainment Journalism Awards.She graduated from the University of Virginia with a degree in American Studies. You can follow Sydney's work on LinkedIn, Twitter, and Instagram at @sydneykbradley.Have a tip? You can also contact her via encrypted messaging app Signal (@sydneykbradley.123), encrypted email ([email protected]), or standard email ([email protected]). Use a personal email address, a nonwork WiFi network, and a nonwork device; here’s our guide to sharing information securely.Selected stories:

Young founders are going viral modeDeath isn't the end: Meta patented an AI that lets you keep posting from beyond the graveDating apps are betting millions that AI will convince you to fall back in love with themHitting the social media jackpot is harder than ever — and it's changing the creator economyBig Tech's AI obsession is rattling creatorsNew startups race to bring back the 'old internet' vibes of the 2000sThe mysterious demise of a $1 billion social shopping appThe loneliness epidemic has given rise to a new crop of startups aiming to help people connect in real lifeIt's not just you — no one is posting on social media anymoreHow Instagram's unpredictable changes are giving influencers whiplashWhy YouTube subscriber counts have become an unreliable 'vanity metric' in the era of short videoInside the week that changed Facebook forever

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Lucia Moses covers the media and entertainment business, with a focus on creators. She's broken stories about MrBeast's business ambitions, Google's movie initiative, and Netflix's push into podcasts.Her reporting has won the Los Angeles Press Club's National Entertainment Journalism Awards.She previously worked at Digiday and Adweek and graduated from Cornell University.Reach her at [email protected], X at @lmoses, LinkedIn, or via phone/text/Signal at (917) 209-8549.Popular articles

MrBeast tries to cut down on his massive spending without killing the magicTikToker Khaby Lame's $975 million deal is riding on a crashing stockActors speak out against AI-generated promos that put them in fake sex scenesRob McElhenney is betting on himselfDisney has a kid crisisWhy Hollywood should be terrified of YouTube, not NetflixAmazon Studios is growing fast and spending big on shows like 'Citadel,' but insiders say unclear creative direction, leadership shifts, and tech bureaucracy threaten to drive away staff and talent

Meta's massive Hyperion data center project in rural Louisiana is getting much bigger and costlier, with a big assist from the state's government.

The company said in a blog post on Monday that the site in Richland Parish, Louisiana — home to what will be Meta's largest data center — will be a 5GW facility and cost over $50 billion. That's higher than the $27 billion figure that was revealed in October, when Meta and Blue Owl Capital formed a joint venture to help with the buildout and management of the facility, originally planned as a 2GW data center.

As Meta pursues its multi-hundred-billion-dollar buildout artificial intelligence buildout, the company and hyperscaler rivals Microsoft, Alphabet and Amazon are taking advantage of tax rebates and energy deals being offered by states that are fighting to get a piece of the AI boom.

In late 2024, Louisiana Republican Governor Jeff Landry signed into law a 20-year sales tax exemption for data centers built before 2029 as part of an effort to court Meta in the state, CNBC previously reported. Landry is set to host a press event on Monday in Baton Rouge.

"I'm a business guy," Landry told CNBC in an interview last year. "What we know is when you look at the overall comprehensive package here, it's in the black. For local government, and the state, and how you get to the bottom line is irrespective to me."

Meta is expanding the project as it seeks to build out enough AI infrastructure to meet demand. The announcement comes after Meta had its best week on the stock market since early 2024 following the release of two major AI models under the leadership of AI chief Alexandr Wang, head of Meta Superintelligence Labs. Investors have been looking for the company to start showing returns on its outsized AI investments.

Meta said in Monday's post that the company "pays the full costs of the energy, water, and related infrastructure the data center uses so consumers aren't paying the cost." Since construction of the Louisiana data center began in December 2024, local businesses have received over $1.6 billion in contracts from Meta, the company said.

"With this expansion, we will be investing over $1 billion in local infrastructure improvements, including roads, water and wastewater systems," Meta said in the post. The company didn't announce a financial partner for the expansion.

When the project began, the estimated price tag was $10 billion. CEO Mark Zuckerberg said in a Facebook post roughly six months later that the supercluster, named Hyperion, would be "able to scale up to 5GW over several years." Unlike traditional data centers, superclusters are packed with graphics processing units and related cutting-edge hardware tailored for AI workloads.

"Meta Superintelligence Labs will have industry-leading levels of compute and by far the greatest compute per researcher," Zuckerberg wrote.

A Meta spokesperson told CNBC that the Hyperion project should reach 2GW by 2030, but there's no timeline for when the full 5GW project will be completed.

WATCH: Meta rebound should continue through July.

watch now

Meta Platforms (META +6.16%) is one of the big spenders in the artificial intelligence (AI) race. Its capital expenditures in 2026 will total between $125 billion and $145 billion. At the midpoint, that estimate would be 88% higher than last year's figure.

However, investors have reason to be skeptical that this will result in a meaningful payoff.

CEO Mark Zuckerberg, who currently has a net worth of $231 billion, admitted that the company's AI bets "haven't come to fruition yet." He said that during an internal town hall on July 2, Reuters reported.

The social media stock dipped 5% that day, although it's up 19% in the month of July (as of July 10).

Image source: The Motley Fool.

Not living up to the hype Meta has been one of the fastest companies to commit fully to AI. Earlier this year, the business laid off 8,000 employees, translating to 10% of its workforce. It also moved 7,000 people into different AI roles. One of the goals was to develop and implement AI agents throughout the organization, an objective that so far has failed to live up to expectations.

Zuckerberg said notable progress should be made in the coming months. But based on the immediate negative share-price reaction, investors were less enthusiastic.

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The slow AI headway is giving shareholders flashbacks to late 2021, when the business changed its name from Facebook to Meta Platforms. The company believed that the metaverse would replace mobile internet as the next major computing platform, a strategic pivot that Meta has since scaled back.

Investors haven't been pleased with Reality Labs' financial performance. This segment of Meta posted a cumulative operating loss of $77 billion during the five-year period from the start of 2021 through 2025. But this dollar figure is peanuts compared to the money being allocated to AI.

Zuck's gamble makes sense With a world-class advertising platform and 3.56 billion daily active users across its family of apps, Meta aims to leverage AI not only to boost engagement and drive higher ad revenue, but to also bring personal superintelligence to everyone around the world. This gives the business a different position than its hyperscaler peers, which largely sell AI and other computing capabilities to enterprise clients.

Meta's huge AI spending makes sense, since the company wants to lead the AI revolution from an individual's perspective. However, Zuckerberg's comments about AI progress being slow have three implications for the broader AI secular trend.

It's almost impossible to precisely measure early results from AI implementation, even for a dominant technology business. Worries about AI agents replacing jobs appear to be overblown right now. And no one has any idea what the ultimate payoff will be from the unprecedented AI spending taking place.

People walk behind a logo of Meta Platforms company, during a conference in Mumbai, India, September 20, 2023. REUTERS/Francis Mascarenhas Purchase Licensing Rights, opens new tab

July 10 (Reuters) - Meta (META.O), opens new tab said on Friday it is discontinuing an AI feature launched this ​week that allowed users to generate images using public Instagram accounts, ‌after drawing widespread criticism over privacy concerns, including from a Hollywood union.

"Our intent was to provide a useful creative tool and to give people control over whether their public ​content could be referenced in this way," Meta said in a statement.

Learn about the latest breakthroughs in AI and tech with the Reuters Artificial Intelligencer newsletter. Sign up here.

"We've ​heard the feedback that this feature missed the mark, so ⁠it's no longer available," it said.

Meta, owner of Facebook and Instagram, had launched Muse ​Image on Tuesday, its first image-generation model from Meta Superintelligence Labs. The feature, ​integrated into its Meta AI chatbot, can use photos as input and lets users edit generated images directly through sketches.

The feature soon faced backlash over privacy concerns and being an ​automatic opt-in for users.

Emmy-winning actor Hannah Einbinder, known for "Hacks," criticized the feature ​on Instagram, saying it had been turned on automatically and urging users to turn it ‌off.

SAG-AFTRA, the ⁠union representing actors and other media professionals, also urged members and other Instagram users on Thursday to opt out of the feature.

"Anything other than a clear and conspicuous opt-in for these types of uses of Instagram users' images ​is unacceptable, and an ​utter miscalculation of ⁠public sentiment regarding the obvious dangers and harms inherent in such use," SAG-AFTRA said.

Following Meta's decision to remove the ​feature, SAG-AFTRA welcomed the move.

"With the dangers of nonconsensual digital ​replicas well ⁠known to all, a feature that encouraged that behavior is unwise. We appreciate its discontinuance. It is the responsible thing to do," a union spokesperson said.

The reversal ⁠reflects ​increasing pressure on technology companies to give users ​clear control over how their publicly shared content is used by AI features.

Reporting by Natalia Bueno Rebolledo ​and Mrinmay Dey in Mexico City; Editing by Edmund Klamann and Tom Hogue

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

Meta shares rallied on Friday, lifting their gains for the week to 15%, on pace for the best weekly performance since early 2024, as optimism builds around CEO Mark Zuckerberg's artificial intelligence strategy.

Three months after introducing Muse Spark, its first proprietary foundation AI model, Meta made two significant announcements this week. On Tuesday, Meta released Muse Image, a new AI model for creating images, and part of an effort to attract creators and advertisers to its new subscription offerings. And on Thursday, the company unveiled Muse Spark 1.1, aimed at running agentic and coding workloads.

This week's revelations show Meta is aggressively trying to make a splash in AI models and compete against OpenAI, Anthropic and Google, which all have big head starts. They also underscore the company's efforts to diversify beyond ads with new revenue streams, and point to progress at Meta Superintelligence Labs, which is being led by Alexandr Wang.

A five-day chart of Meta stock.

With the latest rally, the stock has erased its losses for the year and is now up more than 2%. It's still way behind the Nasdaq, which has gained 13%

Meta also got a boost from reports that the company is progressing with its custom, in-house AI chips, revealed back in March as part of its data center expansion plans. Meta expects to start manufacturing its first chip, code-named Iris, in September as part of its goal to reach 14 gigawatts of computing power next year, according to Reuters.

"Meta may have engineered significant cost savings to get capacity cost per MW well below our and Street expectations," Justin Post, an analyst at Bank of America analyst, wrote following the report.

When Meta reported first-quarter earnings in April, the company raised 2026 guidance for its capital expenditures, or capex, to come between $125 billion and $145 billion and saw its shares sink 7%. At the time, investors appeared concerned about Meta's big AI spending that has yet to create new lines of businesses.

Now that Meta is conveying to investors a more concrete plan about how it will use its ever-growing data center infrastructure, such as potentially competing in the fiercely competitive cloud computing business against giants like Amazon and Microsoft, Wall Street appears more at ease.

It's possible that Meta could further increase its 2026 capex guidance when it reports its second-quarter earnings, BNP Paribas Equity Research senior analyst Nick Jomes said in a research note earlier this week. Jomes said that BNNP estimates Meta to raise that figure to come in between $135 billion to $155 billion.

"While we expect near-to medium term elevated capex, we believe Meta is well positioned to generate ample revenue to support its spending, driven by monetization of its own AI initiatives, advertising share gains, incremental subscription revenue, an optionality of cloud offering, and fees for external use of its AI models," Jomes said in the research note. "Recent subscription offer, the potential cloud offering as well as fees for access to its AI model all serve to provide incremental revenue beyond its core advertising revenue, diversify its revenue stream, and generate additional EBITDA and free cash flow."

watch now

Reports that Meta Platforms (META +2.06%) has signed a "multi-year" deal to secure flash memory from Sandisk (SNDK +12.30%) sent Sandisk stock flying -- and Meta stock dying -- early this morning. Meta stock initially fell 4% on the news, before recovering.

As of 11:40 a.m. ET, Meta stock is back in the green, up 0.5%.

Image source: Getty Images.

Details, please Citing internal Meta documents, Reuters reports the social media giant will buy NAND from Sandisk, DRAM from Samsung, and fiber optics from Sumitomo as it builds out its very own artificial intelligence computing infrastructure.

Additional beneficiaries may include Broadcom (AVGO +4.51%), which is helping Meta design Iris AI semiconductors for its data centers, and also Taiwan Semiconductor Manufacturing (TSM +0.83%), which will contract-manufacture these AI chips.

All these companies are declining to officially confirm the details of the Reuters report. Regardless, investors are "buying the rumor" and shares of all the U.S. publicly traded stocks named -- Sandisk, Broadcom, and TSMC -- are moving higher today.

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Why Meta stock is slumping Meta stock, on the other hand, is not moving higher, or at least not much. Indeed, Meta stock initially sold off on this news.

Why is that? Consider that Meta has plans to spend $145 billion on AI infrastructure this year, and today's Sandisk news seems to confirm this plan is on track. On the one hand, that kind of money will buy Meta a lot of AI capacity as it competes with the likes of Alphabet, OpenAI, and Anthropic. On the other hand, $145 billion is even more than the $136.6 billion Meta is expected to bring in via cash from operations this year, according to data from S&P Global Market Intelligence.

Meta's skating close to the edge these days, and if that makes investors nervous, I totally understand.

Rich Smith has positions in Meta Platforms. The Motley Fool has positions in and recommends Broadcom, Meta Platforms, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Meta launches a new AI coding model with 'very aggressive' pricing, CEO Mark Zuckerberg says By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Meta CEO Mark Zuckerberg. Chris Unger/Zuffa LLC Meta could spark a price war in the booming AI coding market.

The tech giant announced its latest AI model, Muse Spark 1.1, on Thursday, saying it performs well on industry tests for coding and AI agents. It's Meta's first AI model that it charges users for.

In comments on X, Meta CEO Mark Zuckerberg said the model has a "very low price," though the company hasn't announced the cost yet. He also called out other AI companies for pricing their chatbots at "very extreme" levels in comments to Bloomberg. He told Bloomberg that the model outperformed Google's Gemini in several categories, including agents, coding, and other capabilities.

"We think that there's a real ability to be able to offer frontier or very high-level intelligence at a much more affordable cost," Zuckerberg told the outlet.

The model, which isn't fully available to developers yet, marks the latest milestone for Meta's AI efforts — and shows the company intends to compete on price.

If Meta's new AI models can compete with widely-used coding tools from rivals like Anthropic, OpenAI, and Cursor, that could represent a huge new source of revenue. Meta's stock was up nearly 2% on Thursday.

The cost of using AI has become a growing concern for companies as employees incorporate the technology into more of their day-to-day work. Companies have been throttling their employees' use of AI in recent months as vibe coding takes off. Coinbase, for example, now limits its engineers' weekly AI spending to $500 to $5,000 a week.

Meta quoted one of its customers, AI coding startup Cline, saying that the new AI model's price point makes it easy to run heavy AI coding tasks at scale.

"That combination is rare, and it's exactly why we wanted Cline developers to have access early," Saoud Rizwan, the Cline CEO, said on Meta's website.

Meta is spending massive amounts of cash on AI, raising its capital expenditure guidance for this year to $125-$145 billion, up from a previous estimate of $115-$135 billion. Meta remains highly dependent on its ads business, which accounts for about 98% of its total revenue, according to its first-quarter earnings results.

"We believe Meta is well positioned to generate ample revenue to support its spending, driven by monetization of its own AI initiatives, advertising share gains, incremental subscription revenue, an optionality of cloud offering, and fees for external use of its AI models," BNP Paribas Equity Research senior analyst Nick Jomes wrote in a note to investors on Thursday.

Meta is also working on a coming AI model codenamed "Watermelon," which its AI chief Alexandr Wang says has caught up to one of the latest versions of OpenAI's ChatGPT.

The model uses "an order of magnitude" more computing power than Meta's previous model, Wang told staff last week, Business Insider reported earlier.

Meta didn't respond to a request for comment.

Have a tip? Contact Charles via email at [email protected] or on Signal and WhatsApp at 628-282-2811. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.

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Charles Rollet You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Charles Rollet is BI's tech correspondent in San Francisco. Prior to joining BI, Charles worked at TechCrunch covering startups and VC. Charles is based in the Bay Area, where he enjoys hiking with his dogs. You can contact Charles securely on Signal at charlesrollet.12 or +1-628-282-2811.

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While the company continues rolling out consumer-facing AI products—including the recently introduced Muse Image and upcoming Muse Video models—Meta has also been quietly embedding artificial intelligence throughout its own operations, particularly inside its engineering organization.

Meta Is Using AI To Build MetaMeta’s internal AI push extends well beyond public-facing products.

According to reports, the company has set ambitious internal goals for AI-assisted software development, encouraging engineers to adopt coding tools such as DevMate, Metamate and Google’s Gemini. Some engineering teams have targets for AI to assist with the majority of their code changes, while Meta has also pushed broader adoption of AI tools across its technical workforce.

Separately, Meta has been consolidating many of its workplace AI capabilities into Metamate, its primary internal enterprise AI assistant. The company has said it wants Metamate to become the starting point for a wide range of employee tasks—from conducting research and prototyping new features to preparing presentations and coordinating work across teams.

Why Investors Should CareThe strategy highlights a different way to think about AI returns. Rather than measuring success solely by chatbot users or subscriptions, investors may also want to consider how artificial intelligence improves Meta’s own productivity.

Engineering talent represents one of the company’s largest operating expenses. If AI helps developers write code faster, automate routine tasks or shorten product development cycles, Meta could improve the return on one of its biggest investments without adding new revenue streams.

That’s a different kind of AI payoff—one driven by operating leverage rather than direct monetization.

Investment TakeawayMeta’s consumer AI products will continue to attract headlines, and Muse Image is the latest example of the company’s push to expand AI across Facebook, Instagram, WhatsApp and its Meta AI assistant.

But the company’s internal AI strategy may prove just as significant.

By integrating tools like DevMate and Metamate into everyday engineering and workplace workflows, Meta is betting that AI won’t just build better products—it will help build a more productive Meta. For long-term investors, that could make the company itself one of the biggest beneficiaries of its own AI revolution.

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Three months after unveiling its first artificial intelligence model under the leadership of AI chief Alexandr Wang, Meta is rolling out a major update as it attempts to compete with OpenAI and Anthropic in critical areas of the market.

Muse Spark 1.1, which Meta introduced on Thursday, represents its "strongest model for agentic and coding work yet," Wang said in an interview with CNBC. The initial Muse Spark model released in April was only available to "select partners" who could access the technology via a "private API preview."

Meta is making the new model's API available through a developer portal as part of a public preview, where users will be able to sign up and see instructions for integration. A Meta spokesperson said some early partners can already access the API, and new users "will be able to add themselves to a waitlist and be added from there over time." For now, Meta said it's limiting API access to its own properties rather than making it available on third-party platforms like the popular OpenRouter marketplace.

"This is going to be served on top of the computer infrastructure that we've built," Wang said.

It's Meta's second notable rollout for the Muse family this week. On Tuesday, Meta released Muse Image, originally code-named Mango, a model for creating images, as the company seeks to attract creators and advertisers to its offerings.

Meta CEO Mark Zuckerberg is coming under pressure from Wall Street to show a return on the company's massive and growing investment in AI infrastructure and development. While it's spending at the rate of its hyperscaler peers, Meta doesn't have a cloud infrastructure business (though it plans to start one), and it's failed to keep up with OpenAI, Anthropic and Google in developing popular models and AI applications.

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Wang characterized pricing of the Muse Spark update as "very aggressive and attractive" compared with similar offerings from labs like Anthropic and OpenAI. He said every new API account will start with $20 in free credits. From there, the company will charge $1.25 per million tokens in input, and $4.25 per million tokens of output, he said.

"The goal is to really have attractive pricing that scales with immense consumption usage," Wang said.

He said Muse Spark 1.1 outperformed rival models in certain tasks involving the ability to interact with various third-party coding products and services. 

Wang's Meta Superintelligence Labs, or MSL, trained Muse Spark 1.1 to excel in coding-related tasks because that ultimately improves the capabilities of AI agents that can autonomously perform multiple tasks like a fleet of human interns, he said.

"You kind of have to build coding capabilities as part of that in service of overall agentic capabilities," Wang said.

The tech industry's excitement about AI agents took off in the first half of 2026, in part due to the sudden popularity of OpenClaw, which developers could use to manage AI models that power supercharged digital assistants. Wang said Meta trained Muse Spark 1.1 "to be able to work well with all of the most popular harnesses that developers use today, and we felt that was the best approach for this model given our goal to maximize adoption."

Although Meta's previous AI strategy emphasized releasing its earlier Llama family of models to the open-source community, the company is now focusing on selling access to proprietary AI models.

Wang said that Meta is still "committed to open source" and that his MSL unit has a "variant of Muse Spark that is in development that we do intend to open source." He declined to say when the company would release it.

Wang added that he's been "dog-fooding" the latest Muse Spark model, and is excited about the technology's ability to be used as tool for improving personal health via tasks like searching the web, reading academic papers and accessing personal health-related data.

"It's one of these use cases that I think really encapsulates the needs of these agentic systems," Wang said of his AI and health experiments.

Wang said Meta is currently training a more powerful AI model, code-named Watermelon, but didn't say when it would be released. Muse Spark's code name was Avocado.

WATCH: One year into Meta Superintelligence Labs.

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The "Magnificent Seven" plan to spend more than $700 billion on artificial intelligence capital expenditures this year, a big step up from the $400 billion or so the group spent in 2025.

In 2025, whenever hyperscalers announced plans to increase their AI-related capex, their stocks surged. But now, that spending has become a major point of contention in the market, primarily because investors are worried that the returns on these massive investments may not live up to the hype.

In particular, investors are worried that hyperscalers may overbuild AI infrastructure. Meta Platforms (META 1.91%) CEO Mark Zuckerberg may have just given us a big hint about how valid those concerns might be.

Image source: Getty Images.

Meta's new cloud infrastructure plan could be a tell Recently, Meta announced it is launching a new cloud business that will lease its excess compute capacity to external customers. Shares popped on the news, as it could lead to immediate revenue from the company's new data center builds, which investors are already clamoring to see, given the size of Meta's capex.

Meta has guided for capital expenditures of $125 billion to $145 billion this year, most of which will cover "additional data center costs to support future-year capacity."

The announcement is big news in the AI narrative because back in the third quarter of 2025, Zuckerberg implied that his company wouldn't become a supplier of compute unless it overbuilt AI infrastructure:

Now, I mean, it's of course possible to overshoot that, right? And if we do, I mean, this is what I mentioned in my comments, then we see that there's just a lot of demand for other new things that we build internally, externally. Like, almost every week, people come to us from outside the company asking us to stand up an API service or asking if we have different compute that they could get from us. And we haven't done that yet, but obviously, if you got to a point where you overbuilt, you could have that as an option.

Now, it's not a total surprise, as Zuckerberg has been hinting that Meta might begin leasing compute, and the stock has struggled this year. Even after the rally on the cloud announcement, the stock was still down about 9.5% year to date as of July 6.

Does this signal a massive overbuild? As with everything else in AI, it's hard to provide a definitive answer on whether we are at the beginning of a massive overbuild in AI infrastructure. After all, consider that Space Exploration Technologies recently raised nearly $86 billion in its massive IPO, partly on the thesis that it will deploy an enormous constellation of data center satellites in orbit.

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Zuckerberg also does not necessarily view the current situation as an outright infrastructure overbuild; rather, it is that the company has gotten ahead of schedule in building what it will require. On the company's third-quarter 2025 earnings call, he also said that the worst-case scenario is that Meta has built some of its AI data center capacity a few years in advance. In this scenario, while those assets would experience some loss and depreciation, the company will eventually utilize the compute.

Additionally, rental prices for most graphics processing units (GPUs), even older models, appear to be on the rise, suggesting that demand for compute remains strong.

All that said, investors should continue to weigh the evidence carefully on both sides of the debate, and understand that the narrative could break in either direction. Furthermore, the hyperscalers have not yet spent the full $700 billion that they've allocated to capital expenditures this year. They could easily revise their AI capex guidelines should conditions require it.

If there is a pullback in spending, while investors in individual "Magnificent Seven" stocks may feel relieved, the market could view it as a major red flag for the entire AI trade.

Perhaps this scenario has been somewhat priced into these stocks, given the group's struggles thus far this year, but it's a risk investors need to be cognizant of, and Zuckerberg may have given the market a glimpse of what's to come.

Meta’s AI glasses have a growing reputation as a creepy technology. The company hopes to change that opinion by announcing an update that will disable the camera if the LED light that indicates the glasses are recording has been tampered with.

The move is seemingly a concession to consumer sentiment that the glasses aren’t just fun, fashionable accessories, happily promoted by Kylie Jenner, but have serious implications for consumer privacy: They can be abused as surveillance devices.

Yet, even as Meta touts the new safeguard this week, the company is also pushing products and features that ask users to surrender more of their privacy to the company.

Whether that’s training its AI on your images, enabling AI features using your personal content unless you opt out, or exploring ways to continuously record or use biometric facial recognition, Meta’s vision of the future seems to always depend on collecting more of your personal data.

In its blog post about the new camera safety feature, the company pats itself on the back, noting that “no other kind of camera has done this and we’re proud to lead the industry effort.” However, Meta also admits that the move was necessary because some people had been using tape to cover the LED light, which had already forced Meta to adapt its tech to disable recording when the LED is blocked.

Determined, those same AI glasses creeps would then use “sophisticated efforts to modify or destroy the capture LED,” Meta’s announcement explains.

In other words, Meta is confirming that some people who use AI glasses have hidden agendas — namely a desire to record situations or people (often women) without their consent.

Despite this, the company is reportedly testing a prototype of AI glasses that would “continuously collect audio while taking photos every few seconds,” sources recently told Financial Times.

Meta’s blog post about the glasses feature attempts to assuage people’s fears about the devices’ privacy by answering questions like “who can see the photos and videos I take on my glasses?” Meta answers by promising, “You, and only you — unless you choose to share them.” Yet, Meta’s privacy policy has explained that any image you share with Meta AI can be used to train its AI.

Image Credits:Meta (screenshot of privacy policy on July 8, 2026) All the while, the company is facing multiple investigations and lawsuits over Meta AI glasses privacy violations. One lawsuit comes after Meta notably canceled a contract with an outsourced tech firm after some of its Kenyan workers alleged they had to view graphic content, like sex, nudity, and people using the toilet, while training Meta’s AI using people’s Meta AI glasses’ videos.

These are hardly Meta’s first scrapes with privacy violations or safety measures, either.

Arguably, Meta’s reputation on privacy has been tainted for years after numerous leaks and lost lawsuits about its alleged lack of child safety measures and desire for growth at all costs. There are books by whistleblowers documenting its alleged abuses, not to mention previous large-scale privacy disasters, like the Cambridge Analytica data scandal and others.

After the 2018 Cambridge Analytica scandal, Meta now insists on its Privacy Progress Update page, “Since 2019, we’ve invested significantly in people, products, and technology to continue to evolve our rigorous privacy program.”

Still, the company plows forward with what many people would consider privacy-violating ideas. Case in point: On the same day it announced the Meta glasses’ new safeguard, it shared that Meta AI can now use anyone’s public Instagram photos to make AI images, unless you opt out.

It also built features to use Meta AI on images in your Camera Roll you’ve never shared and implemented such poor privacy controls in its Meta AI app, leading users to essentially dox themselves by revealing their embarrassing searches.

This is the same company that Apple wouldn’t partner with due to privacy concerns, that records its employees’ keystrokes to train its AI, and that plans to sell targeted ads based on data in your AI chats.

So, while an LED safeguard on AI glasses might be a necessary feature, consumers clearly still have many reasons to remain distrustful of how social media will use their images and data, especially in its broader AI plans.

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Sarah has worked as a reporter for TechCrunch since August 2011. She joined the company after having previously spent over three years at ReadWriteWeb. Prior to her work as a reporter, Sarah worked in I.T. across a number of industries, including banking, retail and software.

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Shares of Meta Platforms (META +2.59%) were heading lower last month as a slew of concerns mounted for the social media giant. Among those were layoffs, overspending on AI and capital expenditures, and a lack of direction in artificial intelligence, as the company has struggled to develop a meaningful revenue stream beyond advertising.

The stock also fell on a report that it would sell new shares to fund its AI ambitions. By the end of the month, shares had given up 11%, according to data from S&P Global Market Intelligence.

As you can see from the chart below, the stock fell steadily throughout the month.

META data by YCharts

Why is Meta sliding? Meta is the only one of the four hyperscalers, which includes Amazon, Microsoft, and Alphabet, to not have its own cloud computing business, though a report broke in July that said it would launch one.

The lack of cloud computing business makes its plans to spend a $125 billion-$145 billion on capital expenditures this year especially risky, and the stock paid the price for it last month.

On June 5, the stock fell 6% after Financial Times reported that the company had been considering raising tens of billions of dollars in a stock offering to support its AI-related spending. The sell-off is understandable as Meta is burning approximately $20 billion a year on Reality Labs, its division that supports its AI projects, and investors have yet to see a return on that investment.

As evidence of the ongoing backlash against social media, the U.K. banned social media for children under 16, which could add to calls for other companies to do the same.

Meanwhile, other reports indicated that morale was low at the company following several rounds of layoffs and after CTO Andrew Bosworth told Wired that its AI reorganization was "atrocious." The head of product for "AI for Work" also said she was leaving the company shortly after being named to the position.

Image source: The Motley Fool.

What's next for Meta The stock popped on July 1 after Bloomberg reported that the company was planning to launch its own cloud computing business, news that came weeks after CEO Mark Zuckerberg said that the idea was "definitely on the table."

Following the stock's sell-off in recent months, Meta stock looks cheap, trading at a price-to-earnings ratio of just around 24 after adjusting for a one-time tax gain in the first quarter.

That looks like a great price to pay for a company that just grew revenue by 33%, but Meta will have to convince investors it's spending its capex dollars wisely in order to unlock the stock's potential.

Jeremy Bowman has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

Meta on Tuesday released Muse Image, a new artificial intelligence model for creating images as the company seeks to attract creators and advertisers to its offerings.

Originally codenamed Mango, the AI technology marks the second major release from Meta Superintelligence Labs led by Alexandr Wang, who oversaw the April unveiling of the Muse Spark large language model that succeeded the company's previous Llama family of models.

Muse Image will be available for consumers to access for free via the Meta AI app and site, WhatsApp direct messages and Instagram Stories. Power users and creators must sign up for one of Meta's new monthly subscription plans that debuted in May to create many AI-generated images and access certain features. If users hit their free limit, they can purchase a Meta One subscription or wait until their limit resets, the company said.

Muse Image will also power advertiser-specific, image-generation tools as part of Meta's AI-powered Advantage Plus service that lets brands more easily develop ad creative for their marketing campaigns and automate certain tasks. Meta said it's been working with businesses and advertisers as part of debuting Muse Image.

"Muse Image brings native reasoning to the creative process to adjust elements, swap styles, and create variations based on the advertiser's creative, resulting in high-quality, on-brand ad variations with fewer iterations," the company said in a blog post for businesses. "In the coming weeks, advertisers and agencies can expect to see image variants powered by Muse Image."

Read more CNBC tech newsChinese lidar maker with Nvidia ties accused of being cyber risk for U.S.China's Alibaba bans Anthropic AI for employees after 'distillation attack' accusationSpaceX President Gwynne Shotwell to donate stock to Trump AccountsMicrosoft cuts 4,800 jobs, as Xbox unit downsizes and plans to spin off four gaming studiosThe new image-generation model and efforts to monetize it show how Meta is trying to expand from its core business of online advertising and generate new revenue sources tied to its hefty spending on AI-related infrastructure.

OpenAI and Alphabet got a head start over Meta in offering similar image-generation models, with Google's Nano Banana becoming a hit with consumers when it was released last fall.

Meta also revealed internal benchmark tests showing Muse Image trailing OpenAI's latest GPT Image 2 model but beating the Nano Banana 2 model in tasks like editing both single and multiple images.  

The social media giant has previously used third-party AI models like Midjourney and Black Forest Labs to power various image and video generation features within its Meta AI app and site. The company said it plans to use its new AI model to reduce reliance on similar third-party technologies.

Meta also plans to release an AI video generation model dubbed Muse Video at a later date, adding in a technical blog that it "offers competitive performance in prompt adherence, visual fidelity, and temporal consistency."

Muse Image will be available on Facebook and Messenger as well as more areas within the Instagram and WhatsApp services later in the year.

WATCH: AI's three big narrative violations.

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At an internal Meta town hall on July 2, 2026, CEO Mark Zuckerberg told employees that AI agent development over the prior four months “hasn’t really accelerated in the way that we expected,” per a recording heard by Reuters. He added that the company’s reorganization was not as “clean” as planned and that its bets on the new structure “haven’t come to fruition yet,” though he expects meaningful benefits within three to six months.

The admission came six weeks after Zuckerberg’s May layoff memo declared “AI is the most consequential technology of our lifetimes” and that “the companies that lead the way will define the next generation.”

The $145 billion Contradiction Meta Platforms (NASDAQ:META | META Price Prediction) has committed to $125 billion to $145 billion in 2026 capex, more than double its $72.215 billion 2025 outlay. In April, Meta inked a $21 billion expanded AI infrastructure deal with CoreWeave through 2032, on top of a 6-gigawatt AMD GPU partnership signed in February. And yet, last week it was reported Meta will rent out capacity much like SpaceX (Nasdaq: SPCX). Bulls have cheered the announcement, noting it gives Meta Platforms more flexibility and could raise substantial revenue in the year ahead.

Bears point ot the fact Meta has enough compute its not able to effectively use it on its products. That could show the company is reaching the limits of AI producing strong ROIC when applied to products from Instagram, Facebook, and WhatsApp. In the past Meta has managed to continue driving engagement across its product suite (and advertising solutions) through increased AI usage.

Shares trade near $584, down roughly 11.5% year to date and about 18% over the past 12 months, underperforming megacap peers. If AI “hasn’t really accelerated,” what is $145 billion buying?

Who Got Cut, Who Got Protected Meta notified roughly 8,000 employees in May 2026, about 10% of its then-80,000 person workforce. Per CNBC reporting from May 20, 2026, cuts hit integrity teams, cybersecurity, content design, and Reality Labs hardest, while AI infrastructure, foundation models, and AI monetization teams were protected. Another 7,000 employees were redirected into newly created AI-focused teams, and 6,000 planned hires were cancelled.

US workers received 16 weeks severance plus two additional weeks per year of tenure, with health insurance extended 18 months. Zuckerberg told staff: “Success isn’t a given.” CFO Susan Li added on the Q1 call that executives “don’t really know what the optimal size of the company will be in the future.”

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.

The Human Cost One Meta policy employee told Wired that morale is low because the US workforce feels it is “being used to train the AI models that will replace them.” Meta’s overall employee rating on Blind has fallen 25% from its Q2 2024 peak, with culture ratings down 39%. Median total compensation slipped by nearly $30,000.

The Counterargument Meta’s Chief AI Officer Alexandr Wang took to X to defend Meta’s efforts and layer on additional context to Zuckerberg’s quote:

First, Mark was clearly talking about the industry’s progress on agentic capabilities on the whole.

But, while we’re on the topic: Our next Muse Spark update is coming soon. Big improvements in coding and agentic capabilities to be more competitive with other leading models.… https://t.co/uTjx8sZM2A

— Alexandr Wang (@alexandr_wang) July 3, 2026

Wang also claimed that while Meta has lagged rivals, its upcoming model (code-named Watermelon) will equal 5.5 from OpenAI.  If Meta can catch up to other ‘frontier labs’ that have made major investments into areas like coding and agentic capabilities, it would go a long way to soothing negative investor sentiment.

An Industry Pattern Meta joins a broader industry trend. Layoffs.fyi counts roughly 110,000 layoffs at 137 tech companies in 2026 so far, after about 125,000 cuts in all of 2025. Goldman Sachs pegs AI-driven layoffs at more than 16,000 payroll cuts per month industry-wide. Cisco cut roughly 4,000 employees the same week as Meta, and Microsoft offered buyouts to about 7% of its US workforce in April.

Zuckerberg’s remark appears to be the first time a major CEO has publicly conceded the acceleration isn’t happening on schedule. Reality Labs alone lost $4.03 billion in Q1 2026. The core ad engine grew revenue 33.08% year over year, but expenses climbed 35%.

If the three-to-six-month window Zuckerberg cited slips, what happens to remaining employees, signed capex commitments, and a stock that has already given back a fifth of its value?

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 (META 4.80%) has been one of the best companies at applying artificial intelligence (AI) to its core business to drive growth. However, the stock has nonetheless struggled amid investor concerns about its high spending on data center infrastructure.

The company helped allay investors' fears when it was announced that the social media giant planned to sell excess computing power and launch its own cloud business. The move would put it into the same business as Amazon, Microsoft, and Alphabet.

Like all three of those companies, Meta has a strong, growing core business that generates substantial operating cash flow. However, it has been their cloud computing units that have driven growth for these companies, as demand for both AI infrastructure services and solutions has been insatiable.

Image source: The Motley Fool.

Moving to the cloud According to Bloomberg, Meta is still deciding whether to sell access to its computing infrastructure or host large language models (LLMs) in its data centers. Meta has developed its own LLMs, and many cloud providers offer their customers third-party AI models like those from Anthropic and OpenAI.

Regardless of which route it goes, the move into cloud computing demonstrates that there is currently so much demand for these services that it is difficult to overbuild your own AI infrastructure, since you can just rent it out to someone else. This is also something that Elon Musk's Space Exploration Technologies (a.k.a. SpaceX) has done, getting strong rates from other players in the field that need the capacity.

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For the stock, it should let investors focus on Meta's core business, which has been hitting on all cylinders. Last quarter, the company saw its revenue growth accelerate, climbing 33% to $56.3 billion.

The growth was driven by a combination of increased ad impressions, which jumped 19% year over year, and higher ad prices, which climbed 12% year over year. Meta is using AI to improve its recommendation algorithm, which keeps users on its apps longer and allows it to serve more ads to them. At the same time, AI is helping advertisers better target and convert users, which is driving up ad prices.

Despite its strong and accelerating revenue growth, Meta trades at a forward price-to-earnings ratio (P/E) of only 18 times this year's analyst estimates. That's cheap for a leading company with that type of growth.

With the move into cloud computing helping ease concerns about overspending and bolstering its strong core business, Meta is one of my favorite AI stocks to own right now for the long term.

Geoffrey Seiler has positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

Meta Platforms (META 4.80%) has been a jarring growth stock over the past year. It's down by 15% year to date, but its fundamentals continue to improve. The stock only trades at a price-to-earnings ratio of 20 and has solid growth rates already, so a single catalyst could result in a meaningful rally.

Reality Labs could be the catalyst. It's the AI hardware part of Meta Platforms' business that includes Quest headsets and Ray-Ban Meta smart glasses. Here's what investors should know.

Image source: Getty Images.

Meta Glasses can become a major hit Meta Glasses are an innovative technology that let you take pictures, speak with AI tools, make and receive calls, and type on virtual surfaces just by wearing them. You don't have to pull out a smartphone to do any of those things anymore.

Meta Platforms debuted Meta Glasses in June with prices starting at $224. Payment plans are available starting at $19 per month, which lasts for two years at 0% APR. These prices are well within the ballpark of what many people can pay, including the $19 monthly plan. This technology is no longer science fiction, and just as importantly, it's more accessible to the average consumer.

While Meta Platforms released smart glasses a few years ago that had a relatively muted reception, those smart glasses were technologically limited and had no AI capabilities. They just let you take pictures using your glasses instead of taking out your smartphone. They were pretty much cameras with no other features. These current AI glasses are far more advanced, which can help them generate more traction.

The company has a massive head start compared to competitors in this new industry. It controls 85% of the AI glasses industry and already has 3.56 billion daily active users on its family of apps, which is a 4% year-over-year increase. Meta Platforms can promote its AI Glasses to its vast user base to get quick momentum and preserve its comfortable lead over competitors.

Having control over a high-potential industry remains compelling. Grand View Research projects a 24.2% CAGR for the smart glasses market through 2033, but the research company also estimates that the smart glasses market is only worth $3.2 billion. If it gets anywhere close to the smartphone market's $556.4 billion total valuation, this early start will be massive.

The success of Meta's AI Glasses should make it much easier for the company to sell other consumer hardware, similar to how Apple sells iPhones and MacBooks. The AI Glasses segment may be a sleeping giant, and the stock's 20 P/E ratio leaves a lot of room for upside momentum if that proves to be the case.

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Meta Platforms is already delivering high growth rates Even though Meta Platforms' stock has been stuck in the mud for more than a year, it continues to gain market share in the online advertising industry. Revenue surged by 33% year over year in Q1, with operating income rising by 30%. Meta Platforms closed out the first quarter with a robust 41% operating profit margin, which makes the current valuation even more baffling.

Meta Platforms' vast amount of capital and high profits make it easier to invest heavily into projects like AI Glasses until they become profitable. AI Glasses can also give Meta Platforms' advertising revenue a boost by creating more ad impressions.

Meta AI Glasses don't have to make up a big portion of total revenue right now. Just an announcement in the upcoming Q2 earnings release that shows meaningful momentum in this segment, combined with results investors have become accustomed to, may be enough to trigger a rally.

The market is focused these days on the immense amount of capital flooding the artificial intelligence (AI) build-out. The hyperscalers are getting all the attention as they embark on an extraordinary investment cycle.

Meta Platforms (META 4.80%) is one such business. The dominant social media platform, which has historically posted huge profits and free cash flow, plans to spend $125 billion to $145 billion on capital expenditures (capex) in 2026, mostly for AI infrastructure. That upper bound is about double the $72 billion figure from last year.

Investors are probably wondering why Meta is transitioning from a capital-light business to a capital-intensive one. There might only be one reason.

Image source: The Motley Fool.

It's all about Meta's advertising On the Q1 2025 earnings call, Meta founder and CEO Mark Zuckerberg said the company has five major opportunities related to the AI revolution. The list includes better recommendations and content, business messaging, the Meta AI assistant, and AI devices. But perhaps the most important priority is leveraging AI to improve advertising capabilities.

"Our goal is to make it so that any business can basically tell us what objective they're trying to achieve -- like selling something or getting a new customer -- and how much they're willing to pay for each result, and then we just do the rest," Zuckerberg mentioned on the call.

He continued by saying that if Meta is successful in this regard, then "the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today."

Connect the dots, and it becomes clear that Meta's ultimate goal is to keep growing its ad revenue at a rapid clip over the long haul. Ad sales totaled $55 billion in the first quarter (ended March 31), representing 98% of the company's entire top line. Advertising is what Meta is all about. That's not going to change.

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The market looks concerned During Q1, Meta reported a 19% year-over-year increase in ad impressions, while the average price per ad rose 12%. These two variables helped lift the company's revenue by 33% compared to the first quarter of 2025. That was the fastest growth rate since Q3 2021.

To justify the $135 billion in capex earmarked for 2026, investors will become more demanding about Meta's financial performance. In fact, they probably already are, as the "Magnificent Seven" stock is down 15% in 2026 (as of June 29) and 29% off its record.

Time will tell whether this AI capex boom will lead to satisfactory returns for one of the world's elite businesses.