Meta Platforms (NASDAQ:META | META Price Prediction) has had a rough first half of 2026, but our model sees a compelling risk-reward setup in mega-cap tech. With shares down 16.5% year to date and the AI capex narrative dividing investors, the pullback has gone too far.
Our 24/7 Wall St. price target for Meta is $796.59, implying 44.77% upside over the next 12 months. Our model’s rating is buy, with a confidence level of 90%, which we consider high.
24/7 Wall St. Price Target Summary Metric Value Current Price $550.25 24/7 Wall St. Price Target $796.59 Upside 44.77% Recommendation BUY Confidence Level 90% From $785 Peak to $550 Pullback Meta topped near $785 in August 2025 before drifting lower for ten months to down 13.3% over the past month and down 23.97% over the past year. The stock trades just 4% off its 52-week high of $793.65 on a calendar basis but well below recent peaks, with the 200-day moving average sitting at $650.02.
Q1 2026 fundamentals tell a different story. Revenue delivered revenue of $56.31 billion, up 33.08% YoY, with EPS of $10.44 versus a $6.66 consensus, a 56.79% beat. Underlying EPS was roughly $7.31.
Ad impressions rose 19% while average price per ad climbed 12%. Management raised 2026 capex guidance to $125 billion to $145 billion, fueling the “incinerating capital” narrative that gathered momentum in late June.
Why Bulls See a Breakout Ahead The bull case rests on Meta’s ad engine compounding while AI investment turns into monetizable products. Q1 saw Business AI weekly conversations rise to 10 million from 1 million at the start of 2026, the Value Optimization Suite cross a $20 billion annual run rate, and AI glasses daily active users triple year over year.
Zuckerberg framed the strategy bluntly: “We are on track to deliver personal superintelligence to billions of people.” Wall Street agrees, with 8 strong buys, 49 buys, and zero sell ratings. Our bull-case scenario points to $864.66 over 12 months, a 57.14% return.
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 Risks Worth Watching The bear case starts with capex. The $125 to $145 billion 2026 capex nearly doubles 2025 spending and pressures free cash flow, which fell 19.39% in 2025. Reality Labs lost $19.2 billion last year, and youth-related litigation trials in 2026 could be material. Polymarket traders assign only 0.5% probability to META hitting $700+ in June to near-term success.
Bulls counter that the forward P/E of 17 is undemanding, and capex feeds the Muse Spark model and custom silicon platform built with Broadcom that powers over 1 gigawatt of compute. Our bear scenario still produces $697.95, a 26.84% gain.
The Setup at Current Levels The 24/7 Wall St. price target of $796.59 reflects a confident buy rating. Meta trades at a forward P/E of 17 and PEG of 0.795 while compounding revenue at 33% with industry-leading margins.
The bull thesis rests on whether ad pricing power and engagement gains can fund the AI buildout without margin collapse. The bear case strengthens if capex spirals past $150 billion in 2027 with no monetization payoff. The risk-reward at $550 favors buyers.
Year 24/7 Wall St. Price Target 2026 $796.59 2027 $816.11 2028 $1,049.06 2029 $1,219.81 2030 $1,384.57 These projections assume Meta converts AI capex into monetizable products at its current pace. Significant upside or downside could result from agentic commerce traction, AI glasses adoption, or regulatory shocks from EU and US youth litigation.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.
Meta Platforms shares META surged in trading on Wednesday following a report that the company is developing a cloud infrastructure business that would sell artificial intelligence computing power and AI models to external customers.
The proposed business would allow Meta to generate revenue from excess AI computing capacity, potentially creating a new source of income while expanding its presence in the fast-growing cloud infrastructure market.
Shares of Meta rose 10.6% in trading following the report.
According to Bloomberg, Meta is developing plans to sell access to AI computing infrastructure and hosted AI models through a new business built around its expanding data center network.
One option under consideration would allow customers to access AI models hosted on Meta's infrastructure, similar to Amazon Web Services' Bedrock platform.
Another would involve selling raw computing capacity, placing Meta in direct competition with AI-focused cloud providers such as CoreWeave and Nebius.
The initiative is part of Meta Compute, the company's internal effort to build and manage AI infrastructure.
The report weighed on companies that already provide AI computing services. CoreWeave fell about 14% in trading, while Nebius dropped 15%.
The move would also expand competition for the major cloud providers, including Amazon Web Services, Microsoft Azure, and Google Cloud.
Meta has significantly increased spending on artificial intelligence infrastructure as it pursues its goal of developing AI "superintelligence."
In April, the company raised its projected capital expenditure for the year by $10 billion to a range of $125 billion to $145 billion, citing "expectations for higher component pricing" and "additional data center costs."
The company has also committed billions of dollars to data centers and AI chips while entering computing agreements with companies including CoreWeave, Google, and Oracle.
A cloud infrastructure business could provide Meta with a way to monetize those investments beyond its core advertising business.
Unlike its cloud rivals, Meta has historically justified its AI spending primarily through improvements to its own products, while Amazon, Microsoft, and Google have long generated revenue by renting computing infrastructure to outside customers.
The report also comes as investors continue to monitor Meta's efforts to commercialize artificial intelligence through products such as its Meta AI chatbot.
Meta Chief Executive Officer Mark Zuckerberg previously acknowledged that selling excess computing capacity is a possibility if the company builds more infrastructure than it ultimately requires.
"It's definitely on the table," Zuckerberg said during a shareholder call in May. "Almost every week there are different companies that come to us from the outside asking us to both stand up an API service or asking if we have compute that they could buy from us at some premium to what we've bought it at."
"We haven't done that yet because we think we have a use for the compute," Zuckerberg said at the time. "But obviously if we get to a point where we feel that we have overbuilt, then that is an option that we have, and that is partially what gives us confidence in investing in building this out."
Zuckerberg has repeatedly argued that computing capacity remains one of the biggest constraints in the AI industry, supporting Meta's strategy of aggressively expanding its AI infrastructure while determining additional commercial uses for that capacity over time.
By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Denise Moreno is stepping into Alex Schultz's CMO role at Meta. Meta Meta is getting a new CMO.
Denise Moreno is stepping into the role as Alex Schultz, the former CMO, becomes Meta's first chief data officer, the company shared Wednesday.
Moreno has had a lower profile, but isn't a stranger to the top job. She temporarily stepped into the CMO role last year when Schultz was preparing for Meta's FTC trial.
A 17-year marketing vet at Meta, Moreno most recently served as global SVP of consumer marketing and growth. Schultz called her his "quiet right hand on growth," crediting her with promoting Meta's products, including its AI glasses and Threads, while building its e-commerce capabilities.
In announcing her new role, Moreno said AI would be key to providing scale and speed to augment the company's human judgment.
Schultz is moving into the data officer role at a time when Meta, along with other tech giants, ramps up its AI spending. In November, Schultz defended the sector's investment level to Business Insider, saying it was "aggressive, but not crazy."
In his new role, he'll focus on everything from building data foundations to AI-powered analytics, experimentation, research, and decision-making.
"We've already made exciting progress — from Analytics Agent, now the most widely used AI agent inside Meta, to foundational work modernizing our analytics infrastructure — but I believe we're only at the beginning of what's possible," he wrote on LinkedIn.
At Cannes Lions in June, Schultz told Business Insider in an interview that the key to avoiding AI slop is the same as avoiding bad results in any area.
"It's only going to work if you are competent at using it," he said.
Meta recently took heat for an REI ad made with a Meta AI tool that showed a bike with two sets of handlebars. Meta declined to comment at the time.
AI won't be for all advertisers, Schultz said at Cannes Lions.
"When you think about AI, you're going to have three categories of things in the future, and I don't think these are particularly groundbreaking," he said. "You will have AI-only content. You will have creators who are enabled by AI, and you will have people and advertisers who swear not to use AI."
Schultz said he sees AI tools as an enabler of creativity and analytics.
"If you look at the most successful people in analytics, it's the ones who think of the right question to answer," he said. "And by the way, they can use the AI tools to turbocharge them."
Lara O'Reilly contributed reporting.
Read next
Lucia Moses You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
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 Marketing
HomeIndustriesInternet/Online ServicesTech StocksTech StocksMeta’s reported interest in monetizing its AI infrastructure is leading investors to question the sustainability of neocloud business modelsJuly 1, 2026, 11:55 a.m. ET
Artificial-intelligence infrastructure providers like CoreWeave and Nebius Group may soon face stiff competition from a new kid on the block: Meta Platforms.
According to a Wednesday Bloomberg report, Meta META is developing an internal “Meta Compute” division to sell its excess cloud capacity. The company is reportedly considering charging developers to use models hosted directly on Meta’s infrastructure, as well as renting its raw compute capacity out in direct competition with existing neoclouds.
The artificial intelligence buildout has created one of the largest infrastructure races in technology history. Companies across the industry are spending hundreds of billions of dollars on data centers, GPUs, networking equipment, and energy capacity to support AI models. Annual AI infrastructure spending by the major hyperscalers is approaching $750 billion, as they, startups, and governments compete for compute power.
That spending wave created a new class of AI infrastructure companies known as “neoclouds.” These specialized providers built businesses around supplying GPU clusters and high-performance computing capacity faster than traditional cloud providers could deliver. But a report from Bloomberg this morning that Meta Platforms (NASDAQ:META | META Price Prediction) is exploring its own cloud business under its Meta Compute initiative sent shares of several AI infrastructure companies lower — raising a bigger question for investors: Is the neocloud opportunity shrinking just as quickly as it emerged?
Shares of Nebius Group (NASDAQ:NBIS), CoreWeave (NASDAQ:CRWV), and IREN (NASDAQ:IREN) are all declining following the news. Nebius and CoreWeave were down about 15% in morning trading, while IREN declined about 6.5%. Meta Platforms is up over 10%.
The market reaction reflects a simple concern: Meta is not just a customer anymore — it could become a competitor.
Neoclouds Built a Business Around AI’s Compute Shortage Neocloud companies exist because AI demand moved faster than traditional cloud capacity.
The biggest cloud providers — Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOG) — remain dominant, but AI companies need GPU capacity immediately. That opened the door for companies focused almost entirely on AI workloads.
Here is how the major players compare:
Company Focus Key Customers/Partners Nebius Full-stack AI cloud, GPU clusters, AI infrastructure Meta, Microsoft CoreWeave Nvidia GPU-focused AI cloud Meta, OpenAI, Anthropic IREN Renewable-powered AI/HPC data centers Microsoft, AI customers Nebius gained attention after securing a deal with Meta worth up to about $27 billion over five years. Nvidia (NASDAQ:NVDA) has invested billions in the company. Nebius is building an AI-focused cloud platform designed around GPU infrastructure.
CoreWeave has followed a similar path. The company’s business model centers on Nvidia GPU availability and optimized AI computing environments. Its agreement with Meta reportedly totals about $21 billion, alongside partnerships involving OpenAI and Anthropic.
IREN took a different route. Originally focused on Bitcoin (CRYPTO:BTC) mining, the company has shifted toward AI and high-performance computing data centers, using renewable energy as part of its infrastructure strategy.
Meta’s Move Is a Risk — But Also a Validation Bloomberg reported that Meta is considering selling excess AI compute capacity through Meta Compute. The company could eventually offer raw GPU capacity or AI-related services. The plans remain early and could change.
The concern, though, is obvious. If Meta spends billions building AI infrastructure and then sells unused capacity, it could pressure pricing for companies whose business depends on renting GPUs.
But there is another side, too. Meta’s own AI ambitions are enormous. CEO Mark Zuckerberg has discussed building massive AI infrastructure to support Llama models and future “superintelligence” efforts. Meta has indicated it expects to build tens of gigawatts of AI capacity over time. Selling excess capacity would be a way to improve returns on those investments.
That strategy is not unusual. Companies with expensive infrastructure often monetize unused capacity. SpaceX (NASDAQ:SPCX), for example, uses its technology platform to serve outside customers through its Starlink business.
Surprisingly, Meta becoming a potential competitor also confirms the scale of the opportunity. Companies do not spend hundreds of billions of dollars building AI infrastructure because demand is disappearing.
The Bigger Risk Is Not Meta — It Is Supply and Execution Granted, neocloud investors need to understand the risks. These companies have attractive growth opportunities, but they also carry heavy capital requirements. Building AI data centers requires billions of dollars in GPUs, power infrastructure, and financing.
The risks include:
AI demand slowing before capacity investments generate returns Hyperscalers flooding the market with cheaper compute Higher interest rates increasing financing costs Customer concentration creating bargaining pressure Customer concentration is especially important. Meta and Microsoft are valuable partners, but they also have the resources to build internally.
That said, neocloud companies still offer advantages. They can deploy specialized AI infrastructure faster, provide flexible capacity, and serve customers that need immediate access to GPUs.
In short, the market reaction looks more like a reset of expectations than the end of the neocloud story.
Key Takeaway Meta’s cloud ambitions are a reminder that the AI infrastructure race will become more competitive. Neocloud companies cannot assume today’s demand environment will continue forever. But investors should not confuse competition with collapse.
Meta’s willingness to spend billions on AI infrastructure supports the core investment thesis: compute demand remains massive. The companies best positioned for the next phase will likely be those with strong contracts, diversified customers, efficient data center operations, and specialized offerings.
For investors, the question is not whether AI compute demand exists. The question is which companies can turn that demand into durable profits as the industry matures.
A woman walks by the Meta Lab in Los Angeles, California, U.S., May 20, 2026. REUTERS/Daniel Cole/File Photo Purchase Licensing Rights, opens new tab
July 1 (Reuters) - Meta said on Wednesday its chief marketing officer Alex Schultz will become the company's first chief data officer, to better manage AI analytics globally.
The Facebook-parent also promoted its vice president of consumer marketing and growth, Denise Moreno, to marketing chief.
The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here.
"My focus in this new role will be helping transform how Meta learns and makes decisions in the AI era," Schultz said in a LinkedIn post, opens new tab.
The leadership changes signal at Meta's move to deepen its focus on data-driven decision-making and AI integration across its operations.
Schultz joined the company in 2007 and held responsibilities across various domains like developing Meta's brand strategy and WhatsApp privacy campaigns, according to his LinkedIn page.
Shares of Meta were up 10% after Bloomberg News reported earlier on Wednesday that the company is building a cloud business to sell excess AI computing capacity.
A 17-year veteran at Meta, Moreno began her career managing email marketing and growth experiments, she said, opens new tab in a separate post.
Axios first reported about Meta naming Schultz as its chief data officer and elevating Moreno as CMO.
Meta is projected to spend as much as $145 billion on AI infrastructure this year, a significant portion of Big Tech's more than $700 billion outlay on the technology.
Reporting by Jaspreet Singh in Bengaluru; Editing by Joyjeet Das
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Meta Platforms Inc's (NASDAQ:META, XETRA:FB2A, SIX:FB) plan to sell spare computing power is less a bold expansion than an admission, that the company has built so much AI capacity it now needs somewhere to put the surplus.
The Facebook and Instagram owner has spent heavily on data centres and chips to chase its artificial intelligence ambitions, a spree that has repeatedly unsettled investors worried about where the returns will come from.
Selling access to that infrastructure reframes the question.
Excess compute that would otherwise sit idle becomes a revenue line, and the capital budget that spooked the market starts to look less like a bet and more like a hedge.
It also drops Meta into direct competition with Amazon Web Services, Microsoft Azure and Google Cloud, the three companies that dominate cloud infrastructure and treat it as a core profit engine rather than an afterthought.
That is the awkward part of the strategy.
Meta would be entering a mature, margin-sensitive market as the newest and least proven vendor, pitching capacity to customers who may also be rivals or wary of feeding a social media giant their AI workloads.
The move borrows directly from Amazon's origin story, where internal infrastructure built for the retail business was rented out and became the industry's most profitable cloud operation.
Whether Meta can repeat that trick is unproven because renting compute is a service business with support, reliability and enterprise sales demands that differ sharply from running social networks.
Still, the logic is hard to fault.
If the AI arms race forces hyperscalers to over-build to avoid being caught short, monetising the overhang is the rational response, and it gives Meta a partial answer to the capex critics.
The signal to watch is pricing, because a company sitting on surplus capacity has every incentive to undercut, and that could squeeze the incumbents' fattest margins.
A pause in talks between the U.S. and Iran have futures taking a step back ahead of Wednesday's opening bell. Tom White turns to the trading action and explains how persisting headwinds keep markets pressured.
Meta Platforms stock is showing upward momentum. What’s ahead for META stock? According to Bloomberg, Meta is forming a business to generate revenue from excess computing power sold to outside customers as part of an internal initiative called Meta Compute.
The plans include two potential offerings. The first involves selling access to various AI models hosted on Meta’s existing infrastructure—similar to Amazon Web Services’ Bedrock offering—with Meta running the data centers and chips powering the models, including its own Muse Spark models, and charging developers to access them. The second involves selling access to raw computing capacity, similar to neocloud businesses like CoreWeave.
Meta Compute is led by Santosh Janardhan, Meta’s head of infrastructure; Daniel Gross, a leader inside the Meta Superintelligence Labs AI unit; and Meta President Dina Powell McCormick.
Bloomberg noted that the company’s plans are still in development and could change. Meta did not immediately respond to Benzinga’s request for comment.
Meta Shares Trend HigherMETA Price Action: At the time of publication, Meta shares are trading 7.05% higher at $603.00, according to data from Benzinga Pro.
Image via Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
Meta Platforms Inc's (NASDAQ:META, XETRA:FB2A, SIX:FB) plan to sell spare computing power is less a bold expansion than an admission, that the company has built so much AI capacity it now needs somewhere to put the surplus.
The Facebook and Instagram owner has spent heavily on data centres and chips to chase its artificial intelligence ambitions, a spree that has repeatedly unsettled investors worried about where the returns will come from.
Selling access to that infrastructure reframes the question.
Excess compute that would otherwise sit idle becomes a revenue line, and the capital budget that spooked the market starts to look less like a bet and more like a hedge.
It also drops Meta into direct competition with Amazon Web Services, Microsoft Azure and Google Cloud, the three companies that dominate cloud infrastructure and treat it as a core profit engine rather than an afterthought.
That is the awkward part of the strategy.
Meta would be entering a mature, margin-sensitive market as the newest and least proven vendor, pitching capacity to customers who may also be rivals or wary of feeding a social media giant their AI workloads.
The move borrows directly from Amazon's origin story, where internal infrastructure built for the retail business was rented out and became the industry's most profitable cloud operation.
Whether Meta can repeat that trick is unproven because renting compute is a service business with support, reliability and enterprise sales demands that differ sharply from running social networks.
Still, the logic is hard to fault.
If the AI arms race forces hyperscalers to over-build to avoid being caught short, monetising the overhang is the rational response, and it gives Meta a partial answer to the capex critics.
The signal to watch is pricing, because a company sitting on surplus capacity has every incentive to undercut, and that could squeeze the incumbents' fattest margins.
Alex Coffey says the second half of 2026 has a strong foundation underneath when turning to historical market metrics. One corner of Wall Street not seeing significant strength: hyperscalers, which have lagged compared to chipmaking peers.
The artificial intelligence race has become a contest of infrastructure as much as software. Amazon (NASDAQ:AMZN | AMZN Price Prediction), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOG) have each built cloud businesses that generate tens of billions of dollars in annual revenue by renting computing power to other companies. Meta Platforms (NASDAQ:META) has taken a different approach, spending heavily to build AI infrastructure almost entirely for itself. That strategy may be about to change.
Bloomberg reported this morning that Meta is organizing a new business to sell excess AI computing capacity, a move that would create an entirely new revenue stream from investments the company was already planning to make.
Meta Moves From Idea to Execution According to people familiar with the matter, Bloomberg says Meta is building a cloud business that will allow outside customers to rent excess AI compute from its expanding data center network. The company has not officially announced the initiative, but the report marks the strongest indication yet that Meta intends to commercialize its AI infrastructure.
For investors who have followed the story closely, however, the news isn’t entirely unexpected.
Back in May I wrote that Mark Zuckerberg’s planned $145 billion AI infrastructure buildout could evolve into Meta’s next monster business after Zuckerberg told shareholders at Meta’s annual meeting that offering cloud services was “definitely on the table” if the company built more capacity than it needed. He also noted that outside companies had already expressed interest in accessing Meta’s AI infrastructure.
Bloomberg’s reporting suggests Meta has moved beyond discussing the possibility and is now organizing the business internally.
Why This Opportunity is So Compelling Cloud computing has become one of the technology industry’s most profitable businesses.
Company Cloud Business TTM Revenue Amazon AWS $137 billion Microsoft Azure $95 billion to $100 billion (est.) Alphabet Google Cloud $70.4 billion Meta has never competed in this market because it built infrastructure exclusively to power Facebook, Instagram, WhatsApp, and now its AI products.
That is changing because Zuckerberg is investing at unprecedented levels. Meta expects capital expenditures of roughly $125 billion to $145 billion this year, with the overwhelming majority devoted to AI infrastructure and data centers. If portions of those GPU clusters sit idle between internal workloads, renting that capacity could generate high-margin recurring revenue while improving returns on infrastructure Meta already intended to build.
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.
Granted, Meta will not challenge AWS overnight. Enterprise customers require developer tools, security certifications, customer support, billing systems, and software ecosystems that Amazon, Microsoft, and Alphabet have spent nearly two decades developing.
Still, AI computing demand continues to outstrip supply. That creates an opening that did not exist just a few years ago.
Meta Is Creating a Second Growth Engine The investment case for Meta has long centered on digital advertising, which generated more than 97% of revenue last year. An AI cloud business could gradually diversify that dependence.
Surprisingly, Meta may not even need to become a full-service cloud provider to succeed. Simply offering GPU rentals, AI inference services, or access to its growing portfolio of AI models could attract startups and enterprises struggling to secure enough compute capacity elsewhere.
That would also help justify the enormous capital spending that has raised concerns among some shareholders.
Key Takeaway In short, Bloomberg’s report remains based on unnamed sources, not an official Meta announcement. But it aligns closely with Zuckerberg’s own public comments in May that a cloud business was “definitely on the table.”
If the report proves accurate, Meta won’t just be another AI company. It could become the fourth major hyperscale cloud provider, joining Amazon, Microsoft, and Alphabet in one of technology’s most profitable markets. That opportunity won’t materialize overnight, but savvy investors should recognize what may be unfolding: Meta’s AI spending is evolving from a cost of doing business into the foundation of an entirely new business. For long-term shareholders, that may prove to be one of the company’s most valuable bets yet.
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.
Meta has spent billions of dollars developing AI and building out data centers to support it. But now, the company may be preparing to put those data centers to a more immediately profitable purpose.
On Wednesday, Bloomberg reported that Meta is developing plans for a cloud infrastructure business, selling access to both AI compute power and models. The move would pit it against the big cloud providers like Amazon Web Services, Google Cloud, and Microsoft Azure.
Meta’s decision to sell off excess compute comes weeks after SpaceX, via xAI, announced similar plans. In early May, SpaceX signed a deal with Anthropic to buy out all of the compute capacity at SpaceX’s Colossus 1 data center. SpaceX has signed similar leases since with Google and Reflection AI. The fact that Meta is doing the same is a signal that the winners of the AI race may not be the ones providing the best models and services, but rather the ones who own the data centers.
That is, if the demand for compute continues to hold, and if data centers retain their value. Some skeptics have warned the race to build out AI infrastructure is creating a bubble that leans heavily on rapidly depreciating chips. Others have questioned whether AI companies can generate enough end-user revenue to justify the trillion-dollar bets.
Those concerns haven’t stopped Meta from investing heavily in infrastructure for AI compute. As of the end of the first quarter, Meta had committed to spending $182.9 billion on AI infrastructure in the coming years, including massive ongoing projects in Louisiana and Ohio. The Ohio project, which Zuckerberg said would be the size of Manhattan, is expected to come online this year.
Unlike Google and OpenAI, Meta hasn’t seen significant demand for its own AI models and services. Meta doesn’t break out its revenue from Meta AI or from Llama, its open-weight AI model family, in its earnings, and executives have mostly emphasized the internal corporate uses of AI in public statements. That could mean that Meta’s AI endeavors don’t yet represent a material standalone revenue line.
To get a return on some of its own colossal spend, Meta may copy CoreWeave’s business model and sell access to “raw” compute capacity, according to Bloomberg. The outlet also reported Meta is considering following AWS’s lead and selling access to various AI models — including its recently launched closed-weight model, Muse Spark — hosted on its AI infrastructure.
The new business line will be part of a new initiative reportedly dubbed Meta Compute, which is led by head of infrastructure Santosh Janardhan, Meta Superintelligence Labs leader Daniel Gross, and president Dina Powell McCormick.
The report confirms Zuckerberg’s May statements that a Meta cloud computing business is “definitely on the table” as a way to get a return on some of the massive investment into its strategy to develop AI “superintelligence.”
TechCrunch has reached out to Meta for comment.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Rebecca Bellan is a senior reporter at TechCrunch where she covers the business, policy, and emerging trends shaping artificial intelligence. Her work has also appeared in Forbes, Bloomberg, The Atlantic, The Daily Beast, and other publications.
You can contact or verify outreach from Rebecca by emailing [email protected] or via encrypted message at rebeccabellan.491 on Signal.
Shares of Meta popped 8% on Wednesday on news that the company is building out a new cloud business that could help recoup some of the billions of dollars it's poured into artificial intelligence infrastructure.
Meta will sell its excess computing power to outside customers, CNBC's Jim Cramer confirmed. Bloomberg was first to report the news.
The company is debating whether it will offer access to AI models that are hosted on its infrastructure, or whether it will sell access to raw computing power, according to Bloomberg.
A representative for Meta did not immediately respond to CNBC's request for comment.
Model developers, including Meta, have been racing to secure computing power since OpenAI kickstarted the AI boom with the launch of its ChatGPT chatbot in 2022, and demand far outpaces supply. Meta told investors in April that it plans to spend as much as $145 billion on capex this year as it continues developing data centers and securing the graphics processing units needed to train AI models and run large workloads.
By standing up a cloud business, Meta could generate revenue on the capacity it's not using, a welcome signal for some investors who have been uneasy about the company's spending plans. The new business would also throw Meta into a new and fiercely competitive market, which is dominated by companies including Amazon, Microsoft, Google and CoreWeave, among others.
Meta is following the lead of Elon Musk's SpaceX, which has also started selling excess computing capacity this year. The company has inked lucrative deals with Anthropic, which has agreed to pay $1.25 billion per month for capacity, and Google, which has agreed to pay $920 million a month.
Meta has been struggling to find its footing in the AI industry, even after spending $14 billion to bring in Alexandr Wang from Scale AI last year. The company debuted its first model under Wang's leadership, Muse Spark, in April, which it positioned as a "powerful foundation," not a state-of-the-art offiering.
watch now
Read more CNBC tech newsAnthropic says Trump admin has lifted export controls on Claude Fable 5 and Mythos 5OpenAI, Anthropic backer MGX raises one of the biggest AI funds ever as it closes at $49 billionEmployers who laid off workers citing AI are already starting to regret itRecord chip rally adds $2 trillion in combined value to Micron, Intel and AMD in second quarter
A frenzied push for artificial intelligence dominance comes with a different kind of cost for Meta, where massive layoffs, employee surveillance and departures have fueled reports of a heated internal climate.
A federal judge rejected Meta Platforms’ bid to dismiss a lawsuit by 29 state attorneys general accusing it of designing Facebook and Instagram to addict children and knowingly concealing the harm from the public.
In a decision late on Monday night, US District Judge Yvonne Gonzalez Rogers in Oakland, Calif., denied Meta’s motion to dismiss claims based on deception, unfair practices and violations of the federal Children’s Online Privacy Protection Act.
The judge also said Meta did not comply with that law’s notice and parental consent requirements, and granted summary judgment to the states on that issue.
Meta’s bid to dismiss a lawsuit by 29 state attorneys general accusing it of designing Facebook and Instagram to addict children and knowingly concealing the harm from the public was rejected. Bloomberg via Getty Images Meta and its lawyers did not immediately respond to requests for comment on Tuesday.
Gonzalez Rogers also oversees related multidistrict litigation by more than 2,600 individuals, school districts and local governments over whether social media platforms such as Facebook, Instagram, Google and YouTube, Snapchat and TikTok addict children.
Meta downplays harms The states said research has shown that children’s use of Facebook and Instagram could lead to depression, anxiety, insomnia, interference with education and daily life, and self-harm including suicide.
Meta countered that the attorneys general had no evidence it misled consumers about its platforms’ alleged addictiveness, including in congressional testimony by Chief Executive Mark Zuckerberg.
The Menlo Park, Calif.-based company said this was because “social media addiction” is not an established psychiatric condition, and therefore statements that its platforms are not addictive could not be false.
The states said research has shown that children’s use of Facebook and Instagram could lead to depression, anxiety, insomnia, interference with education and daily life, and self-harm including suicide. Above, victims’ families after a trial in Los Angeles earlier this year. Andy Johnstone for CA Post
The judge also said Meta did not comply with that law’s notice and parental consent requirements. Getty Images Meta also said it didn’t violate the children’s online privacy law because it directed Facebook and Instagram to a general audience, not just children under age 13.
Judge finds factual disputes about addictiveness In a 38-page decision, Gonzalez Rogers found material factual disputes over whether Meta’s social media platforms are addictive, whether Meta falsely denied it designed them that way, and whether it “partially” directed the platforms at children.
“The AGs present a reasonable interpretation of [Meta’s] statements that Facebook and Instagram are not designed in ways that cause teens to compulsively use the platforms to their detriment,” she wrote. “To the extent plaintiffs’ evidence shows that the platforms are in fact designed to do just that, a jury could reasonably find the statements were untrue to a reasonable person.”
A trial is scheduled for Aug. 18, court records show.
Social media and tech giant Meta Platforms (META 1.18%) has been known for expanding its business in many ways, pursuing various opportunities. The next big opportunity it is reportedly eyeing is prediction markets, which have been one of the hottest new trends in recent years, with people making bets on just about any event.
According to reports, Meta Platforms is working on a prediction markets platform. Could this be a game changer for its business, or is this just another example of the social media company looking to hop on the latest trend?
Image source: Getty Images.
Why the move could make sense for Meta The app Meta Platforms is working on is reportedly known internally as "Arena," but may have a different name if and when it launches. While it would look to tap into Meta's massive user base on its social media platforms, the app would be separate from them. In prediction markets, the more people placing bets, the greater the interest may be, as there are more types of event contracts to bet on, and thus, Meta would have a big advantage over other companies in the space.
The opportunity is a potentially massive one, with the investment firm Bernstein projecting that by the end of the decade, prediction market volumes will top $1 trillion. But what may impede that is regulation, as there have been growing concerns about people trading and making bets with insider information. Building trust on any such platform would be key. At the same time, competition in prediction markets is growing, with many companies looking to get a slice of the pie. But with Meta having billions of active daily users, it could be well-positioned to succeed.
Today's Change
(
-1.18
%) $
-6.63
Current Price
$
555.97
Does this make Meta Platforms stock a better buy? Over the years, Meta has pursued many opportunities, but not all have paid off simply because it has a large user base. People may use Facebook and Instagram regularly, but that doesn't guarantee they'll pivot to other platforms it creates.
Although getting into prediction markets is a good opportunity for the business, I'd hesitate to call it a game changer for Meta. It could take years for any such app to result in significant growth for the business, and even then, it's not a sure thing given the obstacles that the prediction markets industry faces. For a company that generated more than $56 billion in revenue in its most recent quarter, it would take a lot to move the needle and have a significant impact on its financials. Meta social media apps and the ad revenue they generate will continue to be its bread and butter for the foreseeable future.
The good news is that with the stock trading at just 18 times its estimated future profits (based on analyst expectations), it offers some good value right now, and could be a good buy for the long run, regardless of what happens with its latest venture.
Mark Zuckerberg has recently directed a team to build a standalone prediction-market app, internally called “Arena” (and also codenamed Antwerp and FBForecast), to rival Kalshi and Polymarket. The market already noticed. Retail chatter on Reddit picked it up with a “Meta is reportedly building a play-money prediction market app” thread that drew 35 upvotes and 47 comments on June 27, modest interest quickly drowned out by AI competition worries.
Meta Platforms (NASDAQ:META | META Price Prediction) trades at $564, with the stock down 13.2% year to date. Any new product line lands in a market already skeptical of capital allocation here.
What “Arena” reportedly is Arena would launch with virtual “play money” or points rather than real-cash wagering, sidestepping the gambling regulator gauntlet that Kalshi and Polymarket have spent years arguing through. It would use Meta’s Llama models to auto-generate questions from trending topics and resolve markets in near real-time.
That leverages the AI stack Meta is already paying for, with full-year 2026 capex guided to $125 billion to $145 billion. If you have the GPUs, point them at something.
Sizing the opportunity The category is surging. Combined Kalshi and Polymarket volume reached roughly $24 billion per month, Kalshi is worth around $22 billion, and some analysts project the sector could reach $1 trillion.
Against Meta’s $1.4 trillion market cap and $55.02 billion in Q1 advertising revenue, even the bullish version of this market is a rounding error today. The strategic logic here is engagement and data, with near-term revenue largely beside the point.
Why “dominate” could be the wrong word A points-based app generates no direct revenue at launch. The legal landscape is in limbo with dozens of pending lawsuits, and the launch has drawn political heat, including criticism from Senator Blumenthal. Meta’s record on adjacent bets is mixed.
The same investor newsletter that told subscribers to buy Amazon in 2002, Netflix in 2004, and Nvidia in 2005 still publishes two new stock picks every month. Over 23 years, Motley Fool's Stock Advisor has more than quadrupled the S&P 500. New members get this month's picks, the Top 10 Rankings, and a 30-day money-back guarantee. Click here to unlock their next top stocks while new members are still being accepted.
The Libra/Diem stablecoin was abandoned, and Reality Labs has accumulated more than $70 billion in losses, including a $4.03 billion operating loss in Q1 2026 alone. The company absorbs experiments. It does not necessarily execute them well outside the core ad system.
That said, Meta has a massive base of users it can soft-advertise this app to if it does come live. If you are a Facebook or an Instagram user, you have likely seen some snippets from Threads, which is another platform by Meta.
Of course, doing the same with a prediction market app could end up doing more harm than good. Most of Facebook’s users are not tech-savvy, so online gambling ads will be very controversial. But again, Facebook allows third-party gambling ads in countries where online gambling is allowed. Things will get iffy if Meta itself pushes the gambling platforms it owns to its users.
Regardless, the app remains tentative, so anything of that sort is unlikely.
A grounded verdict Meta has the distribution, with 3.56 billion family daily active people, the AI infrastructure, and the patience to lose money on optionality. That combination matters.
However, a reported, unconfirmed, play-money product facing regulatory uncertainty and political scrutiny is a hypothesis worth watching while the evidence accumulates. Polymarket itself is currently pricing a 61% probability that Meta finishes 2026 at a higher valuation than OpenAI, which captures the broader bet better than any Arena speculation.
If You'd Bought Amazon When the Motley Fool Said To…In September 2002, Stock Advisor told subscribers to buy Amazon. In December 2004, Netflix. In April 2005, Nvidia. The newsletter still publishes two new stock picks every month — and over 23 years, has more than quadrupled the S&P 500. Here's how to get this month's picks:
- Join Stock Advisor for one year, with a 30-day money-back guarantee
- Get this month's two new picks — plus the Top 10 Rankings and the full historical pick list
- Read the analysis, decide for yourself, and trade through your own brokerage
Five years from now, you'll probably wish you'd bought this month's picks. Don't miss them.
In the latest close session, Meta Platforms (META - Free Report) was up +2.24% at $562.60. This change outpaced the S&P 500's 1.18% gain on the day. Meanwhile, the Dow experienced a rise of 0.59%, and the technology-dominated Nasdaq saw an increase of 2.07%.
The stock of social media company has fallen by 13.01% in the past month, lagging the Computer and Technology sector's loss of 5.33% and the S&P 500's loss of 2.9%.
Market participants will be closely following the financial results of Meta Platforms in its upcoming release. The company's upcoming EPS is projected at $7.1, signifying a 0.56% drop compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $60.13 billion, indicating a 26.56% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $33.01 per share and a revenue of $253.28 billion, indicating changes of +40.53% and +26.03%, respectively, from the former year.
Investors should also note any recent changes to analyst estimates for Meta Platforms. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Meta Platforms is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Meta Platforms is presently being traded at a Forward P/E ratio of 16.67. Its industry sports an average Forward P/E of 18.67, so one might conclude that Meta Platforms is trading at a discount comparatively.
Meanwhile, META's PEG ratio is currently 0.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.05.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 79, which puts it in the top 33% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
Despite reporting its fastest quarterly growth since the pandemic in the first quarter, Meta Platforms (META +1.50%) has struggled this year.
The stock is down 17% year-to-date due to concerns about rising capital expenditures, layoffs, and artificial intelligence strategy that increasingly seems undisciplined.
As a result, Meta stock is looking unusually cheap, trading at a forward P/E of just 17, which is dirt cheap for a company that just grew its revenue by 33%.
At this point, the company needs a catalyst to change its narrative, and it's hopeful that its latest iteration of smart glasses can help do that.
Image source: The Motley Fool.
Meta has been building out its smart glasses business for years now, partnering with brands like Ray-Ban and Oakley.
At $299, the new Meta are $80 less than its previous entry-level glasses, and it's partnering with Ray-Ban parent EssilorLuxottica to make them, though they won't carry the Ray-Ban brand.
The glasses come in 26 styles and include Meta AI, powered by Muse Spark, its new and improved large language model that replaced LLaMa.
Meta sees glasses as the ideal device for the AI era, as users can easily communicate with them, and they provide an AI assistant that can see what you're seeing.
EssilorLuxottica said it sold more than 7 million of the AI glasses in 2025, up from just 2 million combined in 2023 and 2024, a sign that smart glasses are making progress in going mainstream.
However, Meta will have to ramp up glasses considerably to move the needle on the top line. Assuming an average price of $400 for those glasses, they would generate $2.8 billion in revenue, though that would be split between the two companies.
Today's Change
(
1.50
%) $
8.13
Current Price
$
551.00
Meta's AI strategy In 2025, Reality Labs, Meta's division that contains its smart devices, including glasses and VR headsets, AI labs, and metaverse projects, reported just $2.2 billion in revenue, essentially flat from the year before. Reality Labs lost $19.2 billion due to its spending on AI infrastructure. In 2026, the company expects 70% of its Reality Labs, or roughly $15 billion in expenses, to go to wearables like glasses and VR headsets.
Given the ongoing losses at Reality Labs and the company's plan to spend $125 billion-$145 billion in capital expenditures this year, it's understandable that investors want to see a return on that investment. Some of its AI spending is going to support the core family of apps business, and its advertising engine, which brought in more than $80 billion in operating income last year.
Meta is also the only one of the four major hyperscalers, which includes Amazon, Alphabet, and Microsoft, that doesn't have a cloud computing business. CEO Mark Zuckerberg has said that starting one is "definitely on the table," and doing so seems like a smart move for the company, as it's already receiving interest from prospective customers.
In the AI era, demand for cloud infrastructure has skyrocketed, and Amazon, Alphabet, and Microsoft are all seeing accelerating growth in their cloud businesses, a sign that there would be sufficient demand for a Meta Cloud.
Today's Change
(
1.50
%) $
8.13
Current Price
$
551.00
What it means for investors At this point, Meta seems oversold. Like Microsoft, the stock has tumbled on concerns that it's overspending on capex, but there's no structural risk to the advertising business, and a forward P/E of 17 is a great price to pay for a company that dominates social media and has an operating margin of 41%, even with the losses in Reality Labs.
For the glasses business to make up 10% of its current revenue, Meta would need to grow that business to $20 billion, which could mean selling around 40 million of them. That won't be easy, but its recent progress shouldn't be overlooked, and a price point as low as $299 is likely to pull in some buyers.
At the current stock price, Meta's risks seem more than priced in. The company doesn't need glasses to be successful for the stock to work, but investors seem to be overlooking the possibility that the business does continue to scale and establish a viable second revenue stream for Meta.
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
June 26 (Reuters) - Meta (META.O), opens new tab CEO Mark Zuckerberg has urged his lieutenants to explore partnerships with the popular prediction markets Polymarket and Kalshi as his company builds a similar app, the New York Times said on Friday, citing three employees with knowledge of the matter.
Meta and Kalshi did not immediately respond to requests for comment, while Polymarket declined to comment when contacted by Reuters. Reuters could not independently verify the report.
Get a daily digest of breaking business news straight to your inbox with the Reuters Business newsletter. Sign up here.
The social media company's executives have said Arena, Meta's new prediction market app under development, will differ from Polymarket and Kalshi, which accept real-money wagers, because it will instead rely on video-game-like "points", the report said.
Prediction markets surged in popularity during the 2024 U.S. presidential election and have evolved into an asset class that lets investors wager on a variety of events, from monetary policy to sports tournaments.
But they have also drawn increasing scrutiny as well-timed trades ahead of U.S. President Donald Trump's major policy surprises have potentially led to millions of dollars in profits for unknown traders.
Zuckerberg's target demographic for Arena is 18- to 34-year-olds and Meta is aiming to reach at least 100 million monthly active "predictors" for the app, according to the report.
Arena is being tested internally and may not be released, the report said, adding that Meta plans to eventually integrate parts of Arena into Facebook and Messenger.
The Times first reported on Tuesday that Zuckerberg recently dispatched a small team at his company to create a smartphone app similar to Polymarket and Kalshi.
Reporting by Jaspreet Singh in Bengaluru; Editing by Vijay Kishore
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Megan Brantley of @LikeFolio breaks down consumer sentiment surrounding Meta Platforms (META) as shares trade near 52-week lows. She explains that investor sentiment has been weighed down by AI spending concerns, but says Meta continues to strengthen user engagement by keeping consumers on platforms longer.
Meta Platforms (NASDAQ:META | META Price Prediction) has slid hard in 2026, and that selloff has opened up a setup the model rates as one of the most attractive in mega-cap tech.
Our 24/7 Wall St. price target for Meta is $801.42 over the next 12 months, implying 47.63% upside from $542.87. The recommendation is a buy with high confidence at 0.9 on our 0 to 1 scale, driven by accelerating ad revenue, an expanding AI product stack, and a forward P/E that now sits in the mid-teens.
24/7 Wall St. Price Target Summary Metric Value Current Price $542.87 24/7 Wall St. Price Target $801.42 Upside 47.63% Recommendation BUY Confidence Level 90% A Brutal 2026 Has Reset Expectations Meta has been one of the year’s worst-performing megacaps. Shares are down 17.62% year to date, 11.27% over the past month, and 23.15% over the past year, sitting just above the $519.78 52-week low and well off the $793.65 high.
The selling has come despite a Q1 2026 report that posted $56.31 billion in revenue, up 33.08% YoY, with EPS of $10.44 against a $6.66 consensus. The bear narrative on Reddit is summed up by a viral r/wallstreetbets post titled “Satya and Zuckerberg are incinerating capital,” a reaction to the raised $125 to $145 billion 2026 capex range.
The Case for $865 and Higher Bulls have a clean thesis. Advertising is reaccelerating, with Q1 ad impressions up 19% YoY and price per ad up 12%. CFO Susan Li flagged that Instagram ranking changes drove a “10% lift in Reels time spent”, and the value optimization suite’s revenue run rate is “over $20 billion, more than doubling year over year.”
Mark Zuckerberg called Q1 a “milestone quarter” on the back of Muse Spark, the first model from Meta Superintelligence Labs. With 57 buy ratings against zero sells and a Street target of $827.32, our bull case scenario points to $865.18, or 59.37% upside.
What Could Go Wrong The bear case starts with capex. Meta raised 2026 capital expenditures to $125 to $145 billion, on top of $72.22 billion spent in 2025. Reality Labs continues to bleed, with a Q1 operating loss of $4.03 billion against only $402 million in revenue, and EU regulatory pressure plus 2026 youth-litigation trials remain unresolved.
It should be noted, however, that the Q1 EPS optically benefited from a $3.13 per share tax benefit. Stripping it out, underlying EPS of $7.31 still beat consensus, and management argues the capex is funding inference capacity that will monetize. Our bear scenario lands at $701.33, still 29.19% above the current price.
Meta Price Prediction 2026 to 2030 Stripping it down: Meta trades at a forward P/E of 18, generates a 41% operating margin, and is growing ad revenue at 33%. That combination at a discounted multiple is rare. The 24/7 Wall St. price target stays at $801.42 with a buy rating and high confidence.
The bull thesis hinges on management holding operating margins above 38% while the capex cycle peaks. The bear thesis centers on EU regulation or AI ROIC skepticism compressing the multiple further. The risk/reward at $542 is too asymmetric to ignore.
Year 24/7 Wall St. Price Target 2026 $801 2027 $960 2028 $1,150 2029 $1,360 2030 $1,589 These projections assume Meta continues converting AI infrastructure spend into ad pricing power and agent monetization. Material downside could come from regulatory rulings on EU ads or a sustained Reality Labs drag.
Key Takeaways Meta Platforms posted 33% year-over-year revenue growth to $56.3 billion, aided by AI engagement. META saw Reels watch time rise 10%, while AI-translated videos reach 500M weekly viewers. Meta Platforms expects Q2 2026 revenues of $58B-$61B as it expands AI infrastructure. Meta Platform (META - Free Report) is benefiting from its accelerating growth into artificial intelligence (AI), which is driving significant top-line growth and positioning the company for further upside.
META’s release of the Muse family of models and the upgraded Meta AI assistant has positioned the company as a leader in personal superintelligence, with billions of users now accessing these AI-powered features. This surge in AI-driven engagement is translating directly into top-line growth, as evidenced by a 33% year-over-year increase in total revenues to $56.3 billion for the first quarter of 2026.
The company’s focus on integrating AI into its platforms, which includes Facebook, WhatsApp, Instagram, Messenger, and Threads, is driving user as well as advertising engagements. AI is heavily dependent on data, of which META has a trove, driven by its more than 3.56 billion daily users. Meta Platforms continues to see strong engagement trends with Instagram Reels, where watch time increased by 10% and Facebook video time increased by 8% globally in the first quarter of 2026. AI-translated videos are now watched weekly by more than 500 million users on Facebook and Instagram. Threads continue to grow with more than 500 million monthly active users.
Meta Platforms’ generative AI advertising tools are gaining strong traction, with more than 8 million advertisers using at least one GenAI ad creative tool in the first quarter of 2026. Video generation tools improved conversion rates by more than 3% while adoption among small and medium businesses has been particularly strong.
Meta Platforms is spending heavily on expanding AI infrastructure, which is expected to benefit the company’s top-line growth. For the second quarter of 2026, the company expects total revenues between $58 billion and $61 billion.
META Faces Stiff CompetitionMeta Platforms is facing stiff competition from competitors like Snap (SNAP - Free Report) and Reddit (RDDT - Free Report) . Both Snap and Reddit are expanding their portfolio in the AI space.
Reddit’s investments in artificial intelligence (AI)-powered tools remain noteworthy. The launch and adoption of Reddit Max, an automated, AI-powered campaign tool, enabled advertisers to achieve a 17% reduction in cost per action and a 25% increase in conversion rate in the first quarter of 2026. About 50% of Max campaign advertisers now use AI-powered creative features, and brands like Cozy have reported a 35% higher ROAS and a 28% lower cost per acquisition with these tools.
Snap has reached 956 million monthly active users and 483 million daily active users in the first quarter of 2026, driven by the continued adoption of Augmented Reality Lenses, Spotlight and AI-powered features. Key growth drivers include its AI-powered automation solutions, AI Sponsored Snaps, Sponsored Snaps, Promoted Places, Dynamic Product Ads and subscription offerings, including Snapchat+, Memories Storage and Lens+.
META’s Share Price Performance, Valuation, and EstimatesMETA’s shares have lost 15.6% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector’s return of 14.9%.
META Stock Performance
Image Source: Zacks Investment Research
META shares are overvalued, with a forward 12-month Price/Sales of 5.09X compared with the Internet - Software’s 3.54X. META has a Value Score of C.
META Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $33.01 per share, which has increased by a penny over the past 30 days. This suggests 40.53% year-over-year growth.
Meta Platforms currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Last year, investors were wondering how Alphabet traded so cheaply before it more than doubled. This year, investors ought to wonder why Meta Platforms (META 2.38%) is trading at such a cheap valuation, because it will probably look a lot different in 2027.
Meta Platforms trades at the lowest price-to-earnings (P/E) ratio among the Magnificent Seven stocks, and yet, it's growing faster than most of them. If you review the fundamentals, Meta Platforms' stock looks very undervalued, and it may not trade at this level again for several years.
Image source: Getty Images.
The growth narrative has gotten stronger Meta Platforms is down by more than 10% year to date, but its fundamentals keep climbing higher. Revenue surged by 33% year over year in the first quarter, with operating income up by 30% year over year. While some growth stocks endure corrections in these situations due to high valuations, a 20.5 P/E ratio isn't that high for Meta Platforms' fundamentals.
Not only is Meta Platforms cheaper than the other Magnificent Seven stocks, it also has a lower P/E ratio than the S&P 500, which currently sits at 32.2. Meta Platforms is posting higher revenue and operating income growth rates than the majority of S&P 500 companies, and it's even edging out most of the Magnificent Seven stocks in that regard.
Online advertising remains the bread and butter of the Meta Platforms business model, and that's not necessarily a problem. Online ads have high profit margins and have served the company well for many years. Meta Platforms has mastered the ability to increase the average revenue per user, even as its user growth numbers gravitate toward the low single digits year over year.
Today's Change
(
-2.38
%) $
-13.25
Current Price
$
544.42
Meta Platforms is diversifying beyond online advertising There's absolutely nothing wrong with Meta Platforms making most of its money from online ads, since growth rates are still high, but Meta Platforms is still starting to diversify, which should make investors excited.
If Meta Platforms can diversify, in the same way Alphabet and Amazon started several profitable segments under their corporate umbrellas, it could potentially lead to the stock more than doubling within a year, just like Alphabet recently did.
Meta Platforms is also diversifying in the right industry, artificial intelligence. Meta Superintelligence Labs released its first AI model, and CEO Mark Zuckerberg said the company is "on track to deliver personal superintelligence to billions of people." This product aligns with Superintelligence Lab's ambition to create systems that surpass human intelligence in reasoning, memory, and knowledge. That type of product can introduce new, lucrative revenue streams.
Investors shouldn't hold their breath waiting for other business segments to affect Meta Platforms' revenue. Online ads made up 98.4% of total revenue. However, these opportunities are growing in the background. Meta Platforms is undervalued just for its advertising business, with all of its side quests serving as long-term catalysts that can lead to future gains.
Meta Platforms, Inc. delivered 33% YoY revenue growth and 61% net income growth, but the stock sold off due to higher CapEx guidance. META raised 2026 CapEx to $125–$145 billion, compressing near-term cash flow, yet maintains a Strong Buy rating based on robust ad growth and AI-driven monetization. Key growth drivers include a $30 billion annualized run rate from Value Optimization and partnerships and rapid scaling of business AI and Muse Spark Shopping Mode.
Sarah Wynn-Williams, a former Facebook policy executive, is suing Meta over its attempts to stop her from talking about her book, “Careless People,” a New York Times bestseller.
Meta Platforms Inc. (NASDAQ:META) shares are down approximately 3% over the past week as AI regulatory pressure and a surging capital expenditure budget continue to keep the company in the headlines.
Government Pressure on AI ModelsMeta said it hopes to sign the agreement soon, stating it shares “the administration’s goal of advancing U.S. leadership on robust and secure frontier AI.” The development comes after President Donald Trump signed an executive order on June 2 giving the government responsibility for AI reviews.
The Capex OverhangMeta Shares Edge LowerMETA Price Action: At the time of publication, Meta shares are trading 0.15% lower at $556.83, according to data from Benzinga Pro.
Image via Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
Wally Skalij/Getty; Getty Images; Tyler Le/BI Mark Zuckerberg is realizing there's a limit to ruthless efficiency
Wally Skalij/Getty; Getty Images; Tyler Le/BI
By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
2026-06-25T08:07:01.631Z
Read in app
Early last year, Meta's chief technology officer, Andrew Bosworth, had a clear message for his staff. "You should quit if you feel that way," he told one employee who said workers were being treated poorly. "You should consider working elsewhere," he told another person who questioned controversial changes at the business. He was reinforcing the company Meta had spent the last few years trying to become: a lean, fast, high-pressure organization that no longer had the patience for internal debate. "You can leave," Bosworth said, "or disagree and commit."
But this month, in a memo and a meeting with employees, Bosworth sounded like a different person. Morale is "probably one of the worst it's ever been," he said, adding that the business had done "an atrocious job" with its recent restructuring. "We've undermined the trust you have that your specific expertise and contribution will be valued."
Since 2022, Meta has remade itself around a ruthless management playbook that helped define a new era in Silicon Valley. Through relentless layoffs and many other unpopular decisions, executives charged ahead, emboldened by record profits and apparently immune to the building discontent. Bosworth's comments last week were different — an acknowledgement that Meta's leadership may finally be confronting the costs of its actions.
Meta's workforce is at a breaking point. Employees in the UK are trying to form a labor union, decrying executives' "cruel and shortsighted behaviors." More than 1,600 workers have signed a petition demanding that Meta stop tracking employees' keystrokes to improve its AI models. As Wired reported this month, things have gotten so bad that one frustrated employee hijacked a livestreamed meeting with a profanity-laced outburst directed at an executive. Another compared working in a new AI-training unit to the gulag. Others are so dejected they're actually praying to get laid off so they can leave with at least some severance.
Against this backdrop, Bosworth was one of several executives in recent weeks scrambling to do damage control. Chief Product Officer Chris Cox acknowledged the "insanity of this company" that created a "difficult" and "brutal" environment. CEO Mark Zuckerberg admitted "we've made mistakes."
It's unthinkable that Mark Zuckerberg would be a credible spokesman for change.Sandra Sucher, a professor of management practice at Harvard Business School"It's a classic example of chickens coming home to roost," says Sandra Sucher, a professor of management practice at Harvard Business School. "They have almost systematically destroyed trust. They are trying to figure out how to dig themselves out of the hole that they dug."
The digging started with a mass layoff of 11,000 people in late 2022, which Zuckerberg was at least apologetic about. The company then slashed another 10,000 jobs the next spring in what Zuckerberg hailed as a "year of efficiency," and then another 3,600 in 2025 that he said was to get rid of "low performers," effectively torpedoing some workers' job searches (many of them, it turned out, had received good performance reviews). In March this year, news leaked that the company was about to ax even more jobs, but it didn't confirm the cuts for weeks and didn't notify those affected until May, sending everyone into a nauseating, two-month purgatory. In April, amid the limbo, Meta announced it would start tracking employees' keystrokes, stoking fears that the company wanted to automate their work. And in May, as it laid off 8,000 employees, it reassigned another 7,000, many of them to menial jobs that involve training AI. Meta declined to comment on this story.
In a meeting with Instagram employees this month, Cox compared working there to "running a marathon in the middle of a hailstorm and then, like, your teammate gets replaced and then we're recording you." He added: "It's like what the fuck."
For employees caught in the hailstorm, it must have felt validating for an executive to empathize with their situation. But surely he and the rest of Meta's leadership knew all these things would make employees unhappy, and yet they did them anyway. So why the sudden mea culpa?
Perhaps all the anger, dissatisfaction, and open rebellion was harming productivity. Or the particularly public nature of Meta's dysfunction, with the crescendo of news reports, had become a liability for its reputation with investors. Or maybe executives finally realized what had become patently obvious to everyone else — that whatever Meta was doing just wasn't working. The whole point of adopting this hard-charging management style was to get employees to innovate faster and catch up to competitors like OpenAI, Anthropic, and Google in the all-consuming battle over AI. Instead, Meta has been falling farther and farther behind. Last year, the company delayed — and ultimately never released — what was supposed to be its flagship AI model after engineers reportedly struggled to improve its capabilities; this year, it has repeatedly pushed back another model's rollout to developers.
Which raises the question: Was the post-2022 Meta a huge mistake? Decades of management research suggest fear and instability are a surefire way to hemorrhage star employees, struggle with recruiting new hires, and suppress the kind of creative risk-taking that leads to meaningful breakthroughs.
"I hope we can rekindle the best of the culture we joined," Bosworth said. "One where people have the psychological safety to take risks and do the right thing over a long period of time."
Sucher, who studies trust inside organizations, says executives are making the right move by acknowledging what they did wrong. So are the small concessions they have made in recent weeks, including promising to reduce the size of teams managers oversee, scale back the keystroke-monitoring program, and increase budgets for social events so employees spend more time with each other. Employees who had been reassigned to AI training roles also now have the opportunity to opt into a different role of their choice, the company announced internally this week.
But the real first step, Sucher advises, is for Zuckerberg himself to offer a proper apology that actually includes the word "sorry." And most importantly, she says, Zuckerberg needs to make a credible commitment that he won't keep making the same fundamental error: treating his employees as if they're not human beings deserving of respect and care. That means understanding that workers don't watch their colleagues get laid off, submit to surveillance, and get moved into unwanted assignments — and then magically go back to doing their best work.
"It's very hard to turn the ship on these things," she says. "Usually, it requires a new leader. It's unthinkable that Mark Zuckerberg would be a credible spokesman for change."
Whether that ship will actually turn is a big question for the 70,000 or so people who remain at Meta. It also matters for the rest of the tech industry. We now look back at November 2022, when Meta became the first tech giant to conduct mass layoffs, as the beginning of Silicon Valley's take-no-prisoners era. Will Meta executives' recent comments mark a real course correction at the company and beyond — or just a temporary pause before they return to their harsher ways?
There are some hopeful glimmers. In recent months, both Google and Microsoft have been opting to offer voluntary buyouts over mass layoffs, a more humane approach that helps preserve morale. Zuckerberg himself has promised a period of stability, pledging to hold off on any more big job cuts — at least through the end of the year.
Aki Ito is a chief correspondent at Business Insider.
Most popular
Business Insider tells the stories you want to know about the world of business, technology, and finance
Business Insider tells the stories you want to know about the world of business, technology, and finance
Business Insider tells the stories you want to know about the world of business, technology, and finance
Business Insider tells the stories you want to know about the world of business, technology, and finance
Business Insider tells the stories you want to know about the world of business, technology, and finance
Business Insider tells the stories you want to know about the world of business, technology, and finance
Aki Ito You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Aki Ito is a chief correspondent at Business Insider, writing about all things work. Her biggest features have reported on burnout, salary transparency, hustle culture, the dangers of AI, and the end of workplace loyalty. She also frequently writes about remote and hybrid work, the white-collar recession, the tech layoffs, job searching, and management. In 2022, Aki's story about people refusing to go above and beyond on the job sparked the national firestorm over quiet quitting. That story, along with her feature about hustle culture, won the National Press Club's award for cultural criticism and was a finalist for the Gerald Loeb Award in commentary. Aki's journalism has also won awards from organizations including SABEW, the New York Press Club, the San Francisco Press Club, the Institute on Political Journalism, the Webbys, the Northern California chapter of the Society for Professional Journalists, and the Society of Publishers in Asia.Before joining Business Insider, Aki was a reporter and editor at Bloomberg News for 10 years, covering the tech industry, the Federal Reserve, and Japan's economy.
By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
and Charles Rollet You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Meta CEO Mark Zuckerberg. Bloomberg/Getty Images Meta is walking back its stance on forcing engineers to join a task force focused on AI training, according to an internal memo obtained by Business Insider and four people familiar with the matter.
Last month, Meta reassigned 7,000 employees to units such as an Applied AI task force to help train Meta's coming AI models.
On Wednesday, Meta sent a memo about this task force, saying the company will now "defer to each individual's choice." The company sent the email to employees who had been "drafted," as some described its Applied AI task force.
"As I emphasized before, personal agency will remain at the heart of all opportunities at Meta: we will support employees in whatever decisions they make," the memo said.
"Of course, we'd prefer everyone to stay and push to SOTA together, but we defer to each individual's choice," it read, referring to state-of-the-art.
The memo went on to say that people in the unit would have preferential placement in other parts of the company due to staffing shortages.
Meta declined to comment for this story.
Some employees on Blind called the memo an "undraft."
The task force faced significant backlash last month from employees who compared the job to data labeling.
The reversal comes after chief technology officer Andrew Bosworth addressed a broader morale crisis at the company. During an internal "Tuesdays with Boz" session on June 2, Bosworth told employees that morale was "probably one of the worst it's ever been" in Meta's 20-year history, Business Insider previously reported.
In May, Meta laid off 10% of its staff, or 8,000 people.
Have a tip? Contact Charles via email at [email protected] or on Signal and WhatsApp at 628-282-2811. Contact Pranav via encrypted messaging app Signal at +1-408-905-9124, or email him at [email protected] or [email protected]. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.
Read next
Pranav Dixit You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Pranav Dixit is the Meta Correspondent at Business Insider based in the San Francisco Bay Area. He writes about Meta’s products, policies, and internal workings while examining how the company’s decisions shape how billions of people connect and communicate.Previously, Pranav was the India-based technology correspondent for BuzzFeed News, covering the impact of Silicon Valley’s largest companies on the culture, society, and politics of more than a billion people in South Asia. He has also been a senior news editor at Engadget and ran technology coverage at the Hindustan Times, one of India’s largest national newspapers.Pranav’s reporting has shed light on the human consequences of Big Tech’s quest for growth in emerging markets, and sparked widespread conversations about the impact of American technology companies on the Global South. In 2019, he won Syracuse University’s Mirror Award for a boots-on-the-ground feature about how WhatsApp misinformation sparked gruesome lynchings in rural India. He has also reported from Kashmir, a volatile geopolitical hotspot, documenting the world’s longest-running internet shutdown.His work has been widely cited by major national and international publications, and he has been featured on the BBC, Al Jazeera, and podcasts such as Vox Media’s Land of the Giants to discuss his work. He has also spoken in journalism classes including at UC Berkeley’s graduate journalism program. His writing has appeared in The Guardian, Vox, Time, The Information, and Al Jazeera.Pranav moved to the United States in 2021 from New Delhi, India, to be a fellow at Harvard University’s Nieman Foundation for Journalism, where he studied the evolution of the American tech press and ways newsrooms around the world can cover technology and society more effectively.Got a tip about Meta or anything else in Silicon Valley? Contact Pranav via encrypted messaging app Signal (+1408-905-9124), or email him at [email protected] or [email protected]. You can also reach him on WhatsApp at +857-753-3949 or DM him on X (@PranavDixit) or BlueSky (@pranavdixit.bsky.social).Pranav keeps sources anonymous. Please use a non-work device to reach out.Expertise: Meta, Facebook, WhatsApp, Llama, AI, Threads, Instagram, Mark Zuckerberg, social media, platforms, immigration
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.
Facebook announced on Wednesday that it’s reimagining its Creator Studio tool as a stand-alone AI companion app designed to help creators grow their audiences on the social network.
By giving creators access to this AI companion app, Meta is looking to keep creators active on Facebook as it competes for their attention against rivals like TikTok and YouTube. The company also likely hopes that the app will eliminate the need for creators to turn to third-party tools like ChatGPT when brainstorming content ideas and analyzing performance.
The new app, which is currently being tested with select creators, will have Facebook’s recently launched AI creator assistant built into it. The assistant provides creators with personalized recommendations based on their content style, performance, audience engagement, and goals.
Image Credits:Meta Creators often have to sift through charts and dashboards to understand their performance, but with the AI assistant, they can get quick answers to questions like “When should I post?” and “What are people saying in my comments?” Since the AI assistant is conversational, they can also ask follow-up questions, like how their audience has shifted over time.
Beyond the built-in AI assistant, the Creator Studio app will include a set of several new features, such as an AI-powered comment tool that will help surface the most important comments and draft replies in the creator’s own tone. Creators can edit and approve the drafted replies before posting them, Facebook says.
When creators open the app each day, they will see a feed of daily priorities: reviewing their newest post’s performance, tracking progress toward goals, and flagging comments in need of a reply.
Image Credits:Meta Wednesday’s announcement adds to Meta’s recent wave of app launches. Last month, the company rolled out a stand-alone app for Facebook Groups called Forum that functions similarly to Reddit. In April, Meta launched a new app called Instants that lets users share disappearing photos with Instagram friends.
The pipeline keeps growing. The New York Times reported on Tuesday that Meta is building its own Polymarket-like app, internally called “Arena,” though it has yet to launch.
The cadence is deliberate. The Wall Street Journal reported in April that CEO Mark Zuckerberg told employees that AI-driven efficiencies would enable the company to build more apps than it has historically.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.
Aisha is a consumer news reporter at TechCrunch. Prior to joining the publication in 2021, she was a telecom reporter at MobileSyrup. Aisha holds an honours bachelor’s degree from University of Toronto and a master’s degree in journalism from Western University.
You can contact or verify outreach from Aisha by emailing [email protected] or via encrypted message at aisha_malik.01 on Signal.
Meta Platform’s NASDAQ: META last earnings report disappointed investors, leading shares to fall more than 8% to $611 afterward. This drop has so far indicated the start of a larger slide for the stock, as Meta has continued to tumble, recently falling below $575.
Meta Platforms Today
$558.48 -3.72 (-0.66%)
As of 03:17 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$520.26▼
$796.25Dividend Yield0.38%
P/E Ratio20.30
Price Target$840.60
The company’s increased capital expenditure guidance was the main culprit for that initial drop. Additionally, although Meta grew revenue by 33% year over year (YOY), the company did not make any substantial artificial intelligence product announcements, which likely added fuel for the bears.
Get Meta Platforms alerts:
Unfortunately, as Meta looks to roll out such offerings, there appears to be significant internal turmoil at the company. Meta's Chief Technology Officer (CTO) recently made stark comments about employee morale, and a top AI executive recently left the firm.
While this may seem innocuous at first, it is important to remember that an investment in any stock is also an implicit bet on the people behind the ticker. Meta’s internal struggles are worth paying attention to, especially given the company’s current position. At the same time, Meta Platforms has made tangible progress with its AI strategy, and the machine won’t stop chugging amid the noise.
Morale Nears Basement Levels as Investors Eye AI Product DevelopmentThe question surrounding Meta in 2026 is whether it can justify hundreds of billions in AI spending based on advertising optimization alone. This creates a need for the company to develop other AI products to drive growth.
Against this backdrop, Meta recently laid off 10% of its employees, aimed at helping it cut down costs as AI spending rides higher. Just as significant was the company’s move to reallocate 10% of its remaining workforce to AI-related positions. This could allow the firm to more quickly develop the alternate AI revenue sources investors are watching for.
In that context, recent comments made by CTO Andrew Bosworth are somewhat concerning. In an internal meeting, Bosworth said employee morale is “maybe not the worst it’s ever been in 20 years here, but it’s probably up there. It’s definitely up there,” per Business Insider. In a staff memo, Bosworth also called Meta’s explanation of its AI restructuring to employees "atrocious."
For a company facing pressure to offset its AI spending with AI growth, employee morale sitting near a 20-year low is unlikely to help its mission. This is further exacerbated by the AI component of the restructuring, which appears to be a significant driver of dissatisfaction. Meta has undergone large-scale layoffs before, but this was the first time AI played a significant role in such a move.
Adding to the list of investor concerns is the departure of Emily Dalton Smith. Meta assigned Smith the task of leading improvements in internal AI usage among its employees. However, after only about two months in this role, Smith is leaving the Magnificent Seven company following a 10-year overall stint. While a single departure does not make or break a company, this suggests that even high-up, long-standing employees are unhappy with Meta’s AI shakeup.
Meta’s AI Successes: Sky-High Advertising Growth & Muse Spark DevelopmentDespite this, it is worth detailing the important successes that Meta has achieved recently. As noted, Meta’s growth hit 33% YOY last quarter. This was the company’s fastest growth rate in four years and a huge acceleration compared to 24% YOY growth in the prior quarter. Excluding pandemic-era spikes in revenue growth seen as people spent more time online, Meta’s growth last quarter was its fastest since 2018.
This is largely a product of Meta's use of AI to improve its ranking and recommendation algorithms. Increasingly, its apps are showing users content and ads they are more likely to engage with, boosting growth.
Furthermore, Meta released its latest Muse Spark model in April. According to AI model evaluation site Artificial Analysis, Muse Spark is by far the company’s most intelligent model. On its Intelligence Index, Muse Spark currently holds a score of 43. This is more than three times higher than Meta’s previous model Llama 4 Maverick, which has a score of 14. However, Muse Spark is still well behind Anthropic and OpenAI’s top models, which have scores of 55 to 60.
Nonetheless, Meta has dramatically improved its top model. Furthermore, Muse Spark’s score is now within spitting distance of Alphabet’s NASDAQ: GOOGL top model, Gemini 3.1 Pro Preview, which has a score of 46. Importantly, the shift came just 10 months after Meta hired Alexandr Wang as its first Chief AI Officer. This demonstrates that Meta can still improve quickly—providing confidence that it can do the same going forward.
Current Price$562.52High Forecast$1,015.00Average Forecast$840.60Low Forecast$700.00Meta Platforms Stock Forecast Details
Meta’s internal turmoil is not exactly what investors want to see as the company aims to provide new revenue-generating AI products. Infighting could delay that development exactly when Meta needs to accelerate it.
Still, the huge improvement in top-line growth and the quick turnaround of Muse Spark are testaments to the company's AI success. While internal issues may slow it down, they are very unlikely to stop Meta from delivering key AI improvements in the long term.
Notably, as Meta shares have slid, Wall Street analysts continue to take a bullish outlook on the stock. The MarketBeat consensus price target of $840 implies upside of about 50%.
Should You Invest $1,000 in Meta Platforms Right Now?Before you consider Meta Platforms, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Meta Platforms wasn't on the list.
While Meta Platforms currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Discover the next wave of investment opportunities with our report, 7 Stocks That Will Be Magnificent in 2026. Explore companies poised to replicate the growth, innovation, and value creation of the tech giants dominating today's markets.
The app, internally called “Arena,” would be independent of Facebook and Instagram. It could compete for attention with Polymarket and Kalshi, the biggest prediction markets.
Meta Platforms CEO Mark Zuckerberg arrives outside court in Los Angeles, California, U.S., February 18, 2026. REUTERS/Mike Blake Purchase Licensing Rights, opens new tab
June 23 (Reuters) - Meta (META.O), opens new tab CEO Mark Zuckerberg recently dispatched a small team at his company to create a smartphone app similar to Polymarket and Kalshi, the New York Times reported on Tuesday, citing two employees with knowledge of the matter.
The app will probably rely on a video game-like points system instead of users wagering money, though the company has not ruled out betting real money eventually, according to the report.
Get a daily digest of breaking business news straight to your inbox with the Reuters Business newsletter. Sign up here.
The company did not immediately respond to a Reuters request for comment. Reuters could not independently verify the report.
Prediction markets surged in popularity during the 2024 U.S. presidential election and have evolved into an asset class that lets investors wager on a variety of events, from monetary policy to sports tournaments. Trading platforms such as Robinhood (HOOD.O), opens new tab and Interactive Brokers (IBKR.O), opens new tab have rolled out event contracts.
The Times report said the app is internally referred to as "Arena" by Meta that would function independently from its social networking apps including Facebook, Instagram, WhatsApp and Messenger.
Arena is one of several applications Meta is testing. Another of these standalone apps, Meta Photos, is designed to generate new forms of media, the report said.
Meta aims to grow the app by leveraging its large social networking audiences and directing them toward using it, according to the report. In April, the company reported 3.56 billion daily active people, a metric it uses to track unique users who open any one of its apps in a day.
Prediction markets could balloon to $1 trillion in annual trading volumes by decade-end, Bernstein said in April. But they have also drawn increasing scrutiny as well-timed trades ahead of U.S. President Donald Trump's major policy surprises have potentially led to millions of dollars in profits for unknown traders.
Reporting by Jaspreet Singh in Bengaluru; Editing by Joyjeet Das
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Meta and EssilorLuxottica have launched a new collection of artificial intelligence (AI) glasses called Meta Glasses that is designed to be accessible to a broader audience than the Ray-Ban Meta, Oakley Meta, Meta Ray-Ban Display and Ray-Ban Meta Optics AI glasses the companies already offer.
The new Meta Glasses start at $299, Essilor Luxottica said in a Tuesday (June 23) press release.
Meta Glasses went on sale Tuesday in the United States, Canada, the United Kingdom, France, Italy, Germany, Spain and other European markets. The AI glasses will expand to more markets later in the year, according to the release.
EssilorLuxottica Chairman and CEO Francesco Milleri said in the release: “While our iconic brands continue to be a leading driver of adoption in the market, we see an opportunity to drive access to broader audiences through this company-branded collection. More price-sensitive consumers will have an opportunity to experience the power that wearables bring into their everyday lives.”
In its own announcement of the launch, Meta said Meta Glasses are available in three frame styles and 26 lens and color combinations. They are compatible with prescription lenses.
Meta Glasses feature Meta AI powered by Muse Spark, which is the first AI model from Meta Superintelligence Labs, according to the announcement.
Advertisement: Scroll to Continue
Like the company’s other AI glasses, Meta Glasses are equipped with a dedicated action button that launches Meta AI, open-ear speakers, an advanced multi-mic array, the ability to take photos and videos hands-free, and over eight hours of battery life, per the announcement.
Meta CEO Mark Zuckerberg said in Essilor Luxxotica’s press release: “Our partnership with EssilorLuxottica is about putting powerful AI into frames people actually want to wear. I believe glasses are going to be a main way people access personal superintelligence — and with Meta Glasses, we’re going to make that accessible to a lot more people.”
PYMNTS reported in February 2025 that Meta was among several companies betting on smart glasses to be the next popular connected wearable. The report said that a new wave of smart glasses had emerged and that these AI-powered devices are encased in traditional frames of various styles so users don’t look out of place in public.
It was reported in January that Meta and EssilorLuxottica were considering doubling their capacity to produce Ray-Ban Meta smart glasses from 10 million to 20 million by the end of the year. The report added that if demand continues to grow, they could boost the capacity to 30 million.
Meta Platforms CEO Mark Zuckerberg has directed staff to create a prediction markets platform, a person familiar with the company's plans who asked not to be named confirmed to CNBC.
The New York Times was first to report the development on Tuesday.
The person familiar, who was not authorized to speak on the record about the company's plans, also confirmed to CNBC that the prediction markets app would not use actual money to trade on the platform, a contrast to other prediction markets where traders use cash to speculate on future events.
The Times report said Meta's app would instead rely on a video game-style points system, but that money may be used on the app in the future.
Two employees with knowledge of the plans told the Times the app — referred to internally as "Arena" — would be separate from Meta's social media platforms, Instagram and Facebook. Meta would seek to leverage its Facebook and Instagram user base to direct potential traders to the platform, the report said.
The company declined a request to comment from CNBC.
DraftKings shares Tuesday
Sports betting platform DraftKings fell more than 2% after the report was released, reaching its low of the day. The stock ended off 2%. FanDuel parent Flutter Entertainment also fell nearly 2% after the report, but was still positive on the day, up 0.4%.
Flutter and DraftKings have both struggled over the past year on worries about how prediction market platforms — which offer sports-related event contracts — could disrupt their sports gambling businesses.
Trading platform Robinhood, which offers contracts from various prediction market platforms, also declined after the Times' initial report.
ToplineMeta is developing a new prediction market app to compete with Polymarket and Kalshi, the New York Times first reported, after CEO Mark Zuckerberg directed a small team to start building the new product internally called “Arena.”
Meta CEO Mark Zuckerberg reportedly directed a team to start working on a prediction market.
Zuffa LLC
Key FactsAccording to the report published on Tuesday, the proposed app would work separately from the company’s suite of social media and messaging apps, including Facebook, Instagram and WhatsApp.
Users would initially place bets with video game points instead of real money, according to the report, but it could feature bets with real money in the future.
It is unclear how far along in development the app is—Meta declined to comment to the Times, and did not return a request for comment from Forbes.
Surprising FactMeta briefly ran a similar prediction market app called Forecast, which launched in 2020. In a blog post published that October, researchers at the company outlined a similar plan to use points instead of real money. “Forecasters get points when they join and then regularly get refreshes as they play. There’s a leaderboard that tracks total point ‘profit,’” the researchers wrote. The company quietly shut down the app two years later.
Key BackgroundPrediction markets took off in recent years, with companies like Polymarket and Kalshi recording over $23.8 billion in total trading volume in April, according to research from Pew. The exploding popularity has led traditional sports betting companies, including both DraftKings and FanDuel, to launch their own prediction markets over the last year. This is not the first time Meta has taken on a major competitor that has already seemingly cornered a growing market. The company introduced Stories to Instagram after Snapchat grew in popularity, and introduced Reels as a competitor to other vertical video apps, including TikTok and YouTube Shorts. The company is also developing other new apps, according to the Times report, including an AI image app reportedly called “Meta Photos.”
Key Takeaways Meta expanded Instagram for TV to Samsung Smart TVs, adding to Fire TV and Google TV reach. META is testing channels, Reel casting, Stories on TV and longer-form creator content. Meta said Instagram drove a 10% lift in reel time spent; Facebook video time rose 8% globally. Meta Platforms (META - Free Report) is benefiting from its strategic expansion of Instagram TV (IGTV) reach, leveraging the platform’s growing emphasis on video content to drive higher user engagement. The company’s focus on enhancing video experiences, including improvements to content recommendations and AI-driven personalization, has led to significant increases in time spent on video features such as Reels and IGTV.
Meta Platforms' expanding portfolio has been noteworthy. The company recently expanded Instagram for TV to Samsung Smart TVs in the United States, adding to its availability on Amazon Fire TV and Google TV devices. The company is also testing new features to make shared viewing easier, including interest-based channels, casting Reels from phones, Stories on TV and support for horizontal videos. META is exploring longer-form creator content, episodic series and live broadcasts tailored for the living room experience. The updates aim to make Instagram a more social, communal viewing platform while helping creators reach audiences on larger screens.
Meta Platforms' AI advancements facilitate the auto-translation and dubbing of videos, making IGTV content accessible to a broader, global audience. Over half a billion users on both Facebook and Instagram now watch AI-translated videos weekly. This broadening of reach increases the potential audience for IGTV creators and enhances the platform’s appeal to advertisers seeking to target diverse demographics with localized content. The company continues to see improvements on Instagram, which have driven a 10% lift in reel time spent, while Facebook saw an 8% increase in total video time globally, the largest quarter-over-quarter gain in four years.
Meta Platform’s strong portfolio is fueling robust financial results and is expected to benefit the company’s top-line growth. For the second quarter of 2026, the company expects total revenues between $58 billion and $61 billion.
META Faces Stiff CompetitionMeta Platforms is facing stiff competition from competitors like Snap (SNAP - Free Report) and Reddit (RDDT - Free Report) . Both Snap and Reddit are expanding their portfolio to compete in the rapidly growing digital ad market.
Reddit is continuing to grow as engagement rises and monetization gets better through a stronger performance ad stack. The company is benefiting from an increase in daily active users and weekly active users, along with a higher average revenue per user and more advertisers using tools like Reddit Max, Dynamic Product Ads and improved measurement. AI-led features, including translation and better discovery, are helping broaden the user base and deepen intent-driven use cases, while content licensing adds diversification.
Snapchat has reached 956 million monthly active users and 483 million daily active users in the first quarter of 2026, driven by continued adoption of Augmented Reality Lenses, Spotlight and AI-powered features. Key growth drivers include its AI-powered automation solutions, AI Sponsored Snaps, Sponsored Snaps, Promoted Places, Dynamic Product Ads and subscription offerings including Snapchat+, Memories Storage and Lens+.
META’s Share Price Performance, Valuation, and EstimatesMETA’s shares have lost 14.6% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector’s return of 20%.
META Stock's Performance
Image Source: Zacks Investment Research
META shares are overvalued, with a forward 12-month Price/Sales of 5.15X compared with the Internet - Software’s 3.66X. META has a Value Score of C.
META's Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $33.01 per share, which has increased by a penny over the past 30 days. This suggests 40.53% year-over-year growth.
Meta Platforms currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The European Union is reportedly escalating a probe into Mark Zuckerberg’s Meta over allegations that its social media apps are intentionally designed to get kids hooked.
The European Commission, the EU’s competition watchdog, is close to issuing its preliminary findings – including that Facebook and Instagram are built with addictive features, Bloomberg reported, citing people familiar with the matter.
EU officials have yet to determine exactly when they’ll announce the findings, the report said.
Meta has accused the EU of targeting American firms with major fines. Bloomberg via Getty Images The investigation was first announced in May 2024 and focused on Meta’s potential violations of the EU’s Digital Services Act – which requires Big Tech firms to police content on their platforms.
Meta did not immediately return a request for comment.
EU officials previously said they were concerned that Facebook and Instagram “may stimulate behavioral addictions in children” as well as “rabbit-hole effects” – where kids keep using the apps in a way that causes their physical and mental health to suffer.
The commission had also expressed concern about the effectiveness of Meta’s age verification practices.
The issuing of preliminary findings are a crucial step in the European Commission’s investigation process. Meta will have an opportunity to propose remedies that address the bloc’s concerns.
Under the DSA, companies can be fined as much as 6% of their global sales if they are unable to satisfy regulators.
Meta faces an escalating probe in the EU. wichayada – stock.adobe.com Based on Meta’s fiscal 2025 revenue, that would mean a potential fine of about $12 billion – though the EU’s penalties to date in similar cases have come in far below that level.
Any severe crackdown on Meta could escalate tensions between the European Union and the Trump administration, which has repeatedly criticized EU officials for what it says are discriminary actions against US tech firms.
Charlie Gasparino has his finger on the pulse of where business, politics and finance meet Sign up to receive On The Money by Charlie Gasparino in your inbox every Thursday.
Thanks for signing up!
The EU’s fines have become a sticking point in trade talks between the two sides.
Zuckerberg himself has described the EU’s fines as “almost like a tariff” that have become “sort of like an EU-wide policy for how they want to deal with American tech.”
Separately, Meta is facing a wave of more than 2,000 lawsuits in the US over allegations that its app have fueled social media addiction and online harm among kids.
In March, Meta lost a pair of historic court cases – one in New Mexico and another in Los Angeles – in what critics described as a “Big Tobacco moment” for the tech industry.
Mark Zuckerberg’s Meta is quietly developing a prediction markets app that could challenge industry leaders Polymarket and Kalshi, according to a report.
Zuckerberg recently tasked a small team inside Meta with building the experimental app, which is internally known as “Arena,” the New York Times reported, citing two employees familiar with the matter.
The standalone smartphone app would allow users to make predictions on everything from sports and politics to major news events, according to the report.
Meta CEO Mark Zuckerberg is pushing ahead with plans for a standalone prediction markets app, according to a report. AP Photo/Alex Brandon Unlike existing prediction markets that allow users to wager real money, Arena is expected to initially rely on a video game-style points system, though Meta has not ruled out eventually incorporating real-money betting, one person familiar with the plans told the Times.
The app would operate independently from Meta’s flagship platforms, including Facebook, Instagram, WhatsApp and Messenger, according to the report.
Meta is reportedly hoping to leverage its massive audience to drive adoption of the new service. More than 3.5 billion people use at least one of the company’s apps daily.
The effort is said to be part of a broader push by Zuckerberg to identify emerging online behaviors and build new products around them as growth on Meta’s established platforms matures.
Kalshi has emerged as one of the fastest-growing players in the prediction markets industry. AP Photo/Erin Hooley The Post has sought comment from Meta.
Arena is one of several experimental projects currently under development, according to the report. Another initiative, dubbed “Meta Photos,” is said to focus on creating new forms of media using artificial intelligence.
Prediction markets have surged in popularity over the past two years, drawing users who place bets on outcomes ranging from election results and sporting events to entertainment awards and economic developments.
Polymarket helped popularize online prediction markets covering politics, sports and current events. AP Photo/Erin Hooley The sector has become a lucrative business. According to the newspaper, prediction-market operators handled more than $50 billion in trades last year, with volume already exceeding $130 billion this year.
The boom has attracted interest from traditional gambling operators, cryptocurrency firms and media companies eager to tap into the growing market.
At the same time, the industry has faced increased regulatory scrutiny amid concerns that traders could exploit nonpublic information to profit from bets tied to real-world events.
Meta is no stranger to the concept.
The company launched a prediction app called Forecast in 2020 during the COVID-19 pandemic, allowing users to make forecasts about future events using a points-based system.
Image Credits:David Paul Morris/Bloomberg / Getty Images Mark Zuckerberg is betting that prediction markets are the future.
The New York Times reports that Zuck wants Meta to have its own Polymarket-like smartphone app and has given the go-ahead to develop one, internally calling it “Arena.” The app would be independent of Meta’s other social media offerings, although sources told the paper that those social sites could direct users to engagement with the app.
Sources said the current concept for Arena can be described as “experimental but a top priority,” and it weirdly wouldn’t involve money. Instead, it would essentially be a video game where users would earn points for betting correctly on particular topics. The sources added that money could be added later.
Over the past year, prediction markets have fueled big profits and controversy. As of April, trading volume on platforms such as Polymarket and Kalshi had reached tens of billions of dollars. Other social media sites — like X (which forged a partnership with Polymarket last summer) — have sought to capitalize on the industry.
Legal cases have also spiked. A notable case involves a former high-ranking special forces soldier who was accused of using insider knowledge to profit from the operation to capture Venezuelan president Nicolás Maduro. George Santos is also currently under investigation over alleged Kalshi trades.
States have also begun to sue prediction markets over what they allege are violations of gambling laws. To complicate things further, the current administration, which is decidedly pro-prediction market, has sued states for having sued prediction markets.
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
June 23 (Reuters) - The Trump administration is pressing Meta (META.O), opens new tab to submit its AI models for voluntary review, which would allow the government to evaluate their abilities and vulnerabilities, the New York Times reported on Tuesday, citing four people familiar with the confidential request.
The request was made in emails with the social media giant, the report said, as the administration steps up oversight of the AI industry.
Get weekly news and analysis on U.S. politics and how it matters to the world with the Reuters Politics U.S. newsletter. Sign up here.
The Facebook parent, which launched the Muse Spark AI model in April, is the only major U.S. developer of AI technology that has not reached an agreement to voluntarily share its models with the federal government for review, according to the report.
"We share the administration's goal of advancing U.S. leadership on robust and secure frontier AI. While we are working through the details, we hope to sign the agreement soon," Meta told Reuters in an emailed response.
The U.S. Commerce Department did not immediately respond to a Reuters request for comment.
Earlier this month, the U.S. government ordered Anthropic to suspend access to its most advanced AI models for foreign nationals, citing national security concerns.
OpenAI and Anthropic had already been working with the U.S. government to test unreleased AI models, while Google DeepMind (GOOGL.O), opens new tab, Microsoft (MSFT.O), opens new tab and xAI agreed in May to provide the government early access to new models for national-security evaluations.
Concern is growing in Washington over the national security risks posed by powerful AI systems. By securing early access to frontier models, U.S. officials are aiming to identify threats ranging from cyberattacks to military misuse before the tools are widely deployed.
On June 2, President Donald Trump signed an executive order establishing a voluntary framework for AI developers to offer "covered frontier models" to the U.S. government for up to 30 days before releasing them to trusted partners.
Reporting by Jaspreet Singh in Bengaluru; Editing by Sahal Muhammed and Vijay Kishore
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Meta is developing a prediction market platform that would initially allow betting with play money before the company considers enabling real stakes, Seeking Alpha reported Tuesday (June 23), citing a paywalled article by The New York Times.
Using play money would allow the new platform to sidestep the regulatory hurdles it would face if it enabled the use of real money, according to the report.
Meta’s platform is called Arena, would run independently of the company’s other platforms such as Facebook and Instagram, and is being developed by a small dedicated team, per the report.
Bloomberg also reported on Meta’s project Tuesday and said that with Arena, Meta aims to capitalize on user interest in prediction market platforms and give users a place to interact around sports, politics and other live events.
PYMNTS reported in February that prediction markets are increasingly popular because they sit at the intersection of the gamification of finance, the financialization of culture, and the internet’s compulsion to keep score.
In addition to leading players like Polymarket and Kalshi, other prediction market platforms include PredictIt, ForecastEx, FanDuel Predicts, Robinhood Derivatives event contracts, Crypto.com event contracts, and Myriad.
Advertisement: Scroll to Continue
When Crypto.com launched a new standalone prediction market platform in February, the company said it had seen rapid growth in its existing prediction markets business, with 40-fold weekly expansion over the previous six months.
Cryptocurrency and prediction markets platform Gemini Space Station said in May that it received a $100 million strategic investment from Winklevoss Capital and would use the new funding to fuel its expansion from a crypto company into a markets company. Gemini received a Derivatives Clearing Organization (DCO) license from the Commodity Futures Trading Commission (CFTC) in April and said the license would allow its Olympus affiliate to act as a clearinghouse for regulated derivatives trading, including prediction markets.
Coinbase said in December that it was expanding its new prediction markets business by acquiring The Clearing Company and gaining the specialized talent it needed to expand further in the category. Coinbase said at the time that its prediction market effort is part of its planned “Everything Exchange,” where users can trade every asset class.
Mark Zuckerberg says Meta's new AI glasses must balance fashion with function for people to wear them By You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Meta's new AI glasses, starting at $299, aim to blend fashion with advanced wearable technology. Meta Mark Zuckerberg wants Meta's latest AI glasses to be more than a gadget.
For the Meta CEO, the challenge isn't cramming more AI into a pair of frames — it's making glasses people actually want to wear.
During an interview with Feed Me creator Emily Sundberg, Zuckerberg sounded less like a Silicon Valley executive and more like a fashion designer.
"I think there's going to be a spectrum both of styles and different amounts of functionality and different price points," Zuckerberg said. "But the challenge is that each one you need to hit the sweet spot of making it good-looking and comfortable to wear and delivering on the functionality."
"I'm pretty involved in everything we build," Zuckerberg added.
On Tuesday, Meta unveiled a new line of smart glasses starting at $299, cheaper than the company's entry-level Ray-Ban glasses, as it pushes harder into wearable technology. The new glasses were developed with eyewear giant EssilorLuxottica but don't carry Ray-Ban or Oakley branding.
Zuckerberg said working on smart glasses has exposed him to a different set of priorities than the software world. Through Meta's partnership with EssilorLuxottica, he said he learned about "how they build their brands, how they do their design, what they feel is important."
The Meta CEO developed some fashion interests of his own and evolved from what he said used to be his favorite item back in the aughts: Adidas slides.
Zuckerberg, right, and Dustin Moscovitz, left. Zuckerberg was wearing his Adidas slides. Justine Hunt/The Boston Globe via Getty Images "The future is going to be these different wearable platforms that I think merge with fashion," Zuckerberg said.
For Zuckerberg, the future of AI hardware may need to look more like runway fashion than gaming accessories, and that mindset is increasingly shaping Meta's wearable ambitions as rivals, including Google and Snap, race into AI-powered eyewear. Snap's new AI glasses, for example, immediately received online rebuff for being expensive and clunky after launching earlier in June.
"And I think the key for any one of these," Zuckerberg added, "Whether it's on your wrist or on your face or anything else, it needs to be something that you're proud to wear and it needs to be comfortable."
Read next
Katherine Li You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Meta Wearables VP Alex Himel discusses the newly launched Meta Smart Glasses, highlighting their A.I. capabilities, accessible price point of $299, and the design collaboration with Kylie Jenner on 'The Claman Countdown.
Meta Platforms (NASDAQ: META) stock has fallen sharply in recent months, sliding from its record high of $796 in August last year to $562. Although the decline has left the company looking increasingly undervalued, downside risks remain, and the stock could face further weakness in the near term.
