Meta Platforms (NASDAQ:META), the parent of Facebook, Instagram, WhatsApp, and Threads, has long been a powerhouse in digital advertising. Yet, investors remain cautious as META stock has struggled to maintain its early 2025 gains, rising only 1% year-to-date. Wall Street’s hesitancy is largely tied to Meta’s ambitious capital expenditure (capex) plans, projected at $70–$72 billion for 2025 and expected to exceed $100 billion in 2026.
Despite concerns, Wedbush analyst Dan Ives is confident in Meta’s strategy, calling the company a “table pounder” poised for a capex-driven super cycle. The firm argues that Meta’s investment in AI infrastructure and data centers could fuel significant long-term growth, outweighing short-term volatility.
Earnings Highlight Growth Potential
Meta reported Q3 2025 revenue of $51.2 billion, a 26% year-over-year increase, surpassing expectations. Core advertising revenue benefited from AI-powered targeting, Reels monetization, and higher user engagement across platforms. AI-driven recommendations alone increased time spent on Facebook by 5% and Threads by 10%.
Earnings per share, adjusted for deferred tax valuation charges, would have risen to $7.25 from $6.20. Ad impressions grew 14%, and average ad prices increased 10%, demonstrating that Meta’s advertising engine remains robust.
However, investors were concerned about the coming capex surge. Total expenses are projected at $116–$118 billion for 2025, with significant portions directed toward AI and data infrastructure. Free cash flow fell to $10.6 billion in Q3 from $15.5 billion a year earlier.
Long-Term Strategy and AI Integration
Meta’s focus extends beyond traditional ads. Investments in AI, augmented reality (AR), and the metaverse aim to solidify the company’s future. Management frames heavy spending as strategic, preparing for the AI-driven digital economy. Platforms like Meta AI and Reality Labs represent high-growth potential areas that may transform user engagement and monetization.
Analysts argue that each dollar of capex today could yield $8–$10 over time, validating Meta’s aggressive investment. Meta’s installed AI infrastructure and expanding cloud computing footprint are central to its long-term advantage.
Wall Street’s View
META stock trades at 20.7 times forward earnings, reflecting the market’s premium for scale and innovation. Wedbush maintains a $920 price target and a “Strong Buy” rating, emphasizing confidence in the AI-fueled growth trajectory. Rosenblatt analyst Barton Crockett set a Street-high target of $1,117, citing strong multi-year revenue and EBITDA growth.
Overall, 43 of 56 analysts recommend a “Strong Buy,” with a consensus suggesting 43% upside from current levels. META stock remains a high-conviction pick for long-term investors willing to tolerate near-term volatility.
Balancing Risk and Opportunity
While bullish sentiment is strong, potential risks include rising interest rates, AI competition, and heavy capex that pressures free cash flow. Investors should weigh the short-term volatility against the long-term growth potential enabled by Meta’s AI and metaverse initiatives.
For those willing to accept temporary fluctuations, META stock represents an opportunity to gain exposure to a leading tech firm with a robust ecosystem, scalable AI infrastructure, and a strategy designed to capture the next wave of digital innovation.
Navigating META Stock Volatility
Investors considering META stock must be prepared for near-term fluctuations driven by capex intensity and macroeconomic factors. High spending on data centers, AI, and the metaverse may continue to weigh on short-term profitability, yet the long-term potential is substantial. Meta’s ability to leverage AI across its ad network and expand monetization avenues positions the company to maintain leadership in social media and digital advertising.
Competition remains a factor, with rivals in AI, AR, and social media constantly innovating. However, Meta’s scale, diversified platforms, and deep user engagement give it a durable advantage. Analysts note that dips in the stock could represent attractive entry points for long-term investors aiming to capitalize on the company’s strategic vision.
Ultimately, META stock combines growth potential with volatility. Those with a higher risk tolerance may find this an opportunity to participate in Meta’s AI-driven expansion, while cautious investors may prefer to monitor execution before committing significant capital.
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