Meta Plans Significant Increase in AI Investments
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 21 2026
0mins
Should l Buy META?
Source: Coinmarketcap
Meta Platforms Inc. shares rose 7.22% in pre-market trading, reaching a 20-day high amid positive market conditions.
Zuckerberg announced that Meta will ramp up its AI-related capital expenditures to between $115 billion and $135 billion in 2026, nearly doubling last year's spending. This reflects the company's commitment to AI infrastructure and future growth potential, alleviating investor concerns over AI spending. Additionally, Meta's latest earnings report showed a 24% year-over-year revenue increase, primarily driven by strong online advertising performance, which contributed to the stock's rise.
The significant increase in AI investments signals Meta's strategic focus on enhancing its technological capabilities, which could lead to further growth and innovation in its product offerings.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for META is 824.71 USD with a low forecast of 655.15 USD and a high forecast of 1117 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 670.210
Low
655.15
Averages
824.71
High
1117
Current: 670.210
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Profitability Pressure: As capital expenditures rise, Meta's depreciation expenses increased by 20% in 2025 and are expected to rise further in 2026, leading to a decline in operating margin from 48% in Q4 2024 to 41%, although management still anticipates overall operating income growth.
- AI-Driven Revenue Growth: Meta achieved a 24% revenue growth in Q4, driven by increased user engagement and stable ad price hikes, demonstrating its effectiveness in AI applications and market potential.
- Generative AI Potential: Meta is planning to leverage generative AI to attract more advertisers, combining personalized content and shopping agent features, which is expected to generate substantial ad revenue and further solidify its market position.
See More
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- Legal Action Intensifies: New Mexico has filed a lawsuit against Meta, alleging the company failed to protect apps like Facebook and Instagram from online predators targeting child users, which could lead to significant legal repercussions for Meta.
- Serious Allegations: Attorney General Raúl Torrez claims that Meta is accused of “steering and connecting users, including children, to sexually explicit and exploitative materials,” which not only affects virtual spaces but may also lead to real-world child exploitation.
- Industry-Wide Implications: Experts have noted that this case resembles lawsuits against “Big Tobacco” in the 1990s, potentially having far-reaching effects on Meta and the broader social media industry, especially as public concern over social media safety grows.
- Witness Testimony Scheduled: Meta CEO Mark Zuckerberg and Instagram head Adam Mosseri are scheduled to testify in the upcoming trial, highlighting the high stakes and potential public impact of this case.
See More
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- Bitcoin Rebound: Bitcoin rebounded above $70,000 on Friday, recovering from a sharp drop that nearly brought it below $60,000, reflecting a renewed confidence in the cryptocurrency market, although it remains over 50% off its all-time high.
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- Legal Battle Between Hims and Novo: Novo Nordisk is suing Hims & Hers over alleged copycat versions of its Wegovy obesity drug, leading Hims to announce the withdrawal of its product, which caused its shares to drop over 20% before the market opened.
See More
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- Surge in IPO Proceeds: Goldman Sachs projects that U.S. IPO proceeds will reach a record $160 billion in 2026, quadrupling from 2025, indicating strong economic recovery and robust equity markets.
- Doubling of IPO Count: The number of IPOs is expected to double to 120 in 2026, driven by a recovering economy, rising equity prices, and favorable financial conditions, with software and healthcare sectors leading the charge.
- Large Company Listings: Goldman Sachs notes that 2026 IPOs will be dominated by large private company listings, with proceeds estimated between $80 billion and $200 billion, although recent selloffs in software stocks highlight valuation risks.
- Signs of Market Activity: Approximately $5 billion has already been raised through IPOs in 2026, including notable companies like AI equipment manufacturer Forgent Power and biopharmaceutical firm Eikon Therapeutics, reflecting a strong market rebound.
See More
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- User Growth Resurgence: OpenAI CEO Sam Altman revealed in an internal message that ChatGPT's monthly growth rate has exceeded 10%, indicating a recovery in user demand that is expected to further drive the company's market share and revenue growth.
- New Model Launch: Altman stated that OpenAI plans to launch an updated ChatGPT model this week, which will enhance its product competitiveness, especially in the face of pressure from rivals like Anthropic.
- Strong Codex Performance: OpenAI's coding product Codex grew approximately 50% over the past week, demonstrating increased market acceptance and potentially eroding market share from competitors like Claude Code.
- Ad Testing Initiation: OpenAI will begin testing ads within ChatGPT on Monday; although ad revenue is expected to account for less than half of total revenue in the long term, this initiative could provide new revenue streams and enhance the company's financial stability.
See More
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- Lawsuit Background: New Mexico Attorney General Raúl Torrez alleges that Meta failed to protect apps like Facebook and Instagram from online predators targeting child users, highlighting significant shortcomings in social media platforms' responsibilities towards youth safety.
- Allegations Details: The lawsuit claims that Meta steered users, including children, towards sexually explicit and exploitative content, even facilitating human trafficking, which underscores the potential dangers social media poses to young users' mental health.
- Legal Implications: This lawsuit is likened to the cases against 'Big Tobacco' in the 1990s, potentially leading to profound repercussions for Meta and the broader social media industry, especially as public concern over youth protection intensifies.
- Upcoming Trials: In addition to the New Mexico case, Meta faces another trial in California involving multiple social media platforms accused of designing defective apps that contribute to unhealthy behaviors in teens, further fueling discussions on social media accountability.
See More
