Are Investors Becoming Cautious About AI Investments? Insights from Billionaire Hedge Fund Founder David Einhorn.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 26 2025
0mins
Should l Buy META?
Source: MarketWatch
Market Performance: Stocks reached a record high at the beginning of the week but have since experienced a decline, with the S&P 500 losing 1.3% over three consecutive sessions.
Economic Impact: The market pullback coincided with stronger-than-expected economic data, which led to an increase in bond yields, complicating the identification of the exact cause of the stock market wobble.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 649.810
Low
655.15
Averages
824.71
High
1117
Current: 649.810
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.
Meta May Consider Stock Split in 2026
- Stock Split Motivation: Meta has yet to execute a stock split despite its stock price rising over 200% in the past three years, currently trading around $670, which may deter some investors due to its psychological price barrier.
- Market Performance Analysis: Although Meta's stock has declined over 6% in the past year, its market capitalization remains at $1.7 trillion, indicating the company's strong position and potential investment appeal in the market.
- AI Investment Priority: Meta has recently focused on enhancing its AI capabilities and infrastructure investments, suggesting that a stock split is not a current priority but may be reconsidered in 2026.
- Future Outlook: Should Meta's stock gain momentum and rise quickly in the coming year, it may contemplate executing a stock split, aligning itself with other tech giants to attract more investors.
See More
Pinterest Price Target Cut to $25 Amid Deteriorating Fundamentals
- Price Target Reduction: Evercore ISI has cut Pinterest's price target from $40 to $25 and downgraded its rating from 'Outperform' to 'In Line', indicating a clear deterioration in the company's fundamentals as revenue growth continues to slow.
- Revenue Growth Deceleration: Pinterest's revenue growth rate fell from 17% in Q2 to 16% in Q3, and further down to 13% in Q4, highlighting the severe challenges the company faces in an increasingly competitive market.
- Market Reaction: Following the Q4 revenue miss against Wall Street expectations, Pinterest's stock dropped over 21% in pre-market trading on Friday, and has declined nearly 33% over the past month, reflecting a significant loss of investor confidence.
- Increased Competitive Pressure: Analysts noted rising competitive intensity from AI-driven rivals like Google and Meta, compounded by the impact of tariffs from the Trump administration on major retailers' advertising budgets, which has further exacerbated Pinterest's market challenges.
See More
Market Focus on CPI Report and Trading Strategies
- CPI Report Impact: The January CPI report is set to be released at 8:30 AM EST, with markets assessing whether inflation is cooling enough to justify future rate cuts, which could lead to volatility in bond yields and the US dollar, subsequently affecting equity performance.
- SPY Trading Dynamics: SPY is currently trading around 680.50, and if the data is favorable, it could quickly push to 682.25, with sustained strength potentially challenging 684.00; conversely, a drop below 680.50 may test 678.75, indicating heightened market volatility.
- Tech Stock Reactions: QQQ is near the psychologically significant level of 600.00, and if it breaks above, it could move towards 603.00 and 605.50; however, a decisive break below 600.00 may lead to a decline towards 597.50, with tech stocks being particularly sensitive to rate changes, increasing volatility.
- Individual Stock Expectations: Apple (AAPL) and Microsoft (MSFT) are trading at 261.50 and 401.50 respectively, and if CPI data supports, they may rise to 263.25 and 404.00; otherwise, they could test 259.75 and 398.75, with market sentiment directly influencing individual stock performance.
See More
Tech Giants' AI Spending Soars Amid Market Jitters
- Surging Capital Expenditure: Hyperscalers like Amazon, Microsoft, Meta, and Alphabet are projected to spend $700 billion on AI this year, surpassing the GDP of countries like the UAE, Singapore, and Israel, indicating a massive commitment to AI investments.
- Market Anxiety: Concerns over the scale of AI spending and potential returns led to a $1 trillion drop in Big Tech market caps last week, and despite a recovery this week, investor confidence in future spending plans remains fragile.
- Increased Borrowing Risks: A UBS report highlights that this year's capex from hyperscalers will consume nearly 100% of operational cash flow, compared to a 10-year average of 40%, raising financial risk for these companies.
- Uncertain Payback Periods: Analysts emphasize that hyperscalers need to achieve significant returns on investment before 2030, but the timelines for these returns remain unclear, potentially causing investor reluctance towards further capex increases.
See More
Microsoft's Surprising Underperformance in Generative AI Sector
- Stock Performance Discrepancy: Since the launch of ChatGPT on November 30, 2022, Microsoft's stock has only risen by 61.26%, from $249.18 to $401.84, significantly lagging behind Meta's staggering 454.07% increase, indicating a lack of market confidence in its AI strategy.
- Capex vs. Revenue Growth: Microsoft is projected to exceed $140 billion annually in capital expenditures for data center expansion, while Meta has successfully integrated AI to enhance its advertising core, achieving a 24% revenue growth by early 2026, highlighting a stark contrast in AI monetization strategies.
- Execution Capability Issues: Analysts have labeled Microsoft's slow integration of new AI models as a “skill issue,” and its high customer concentration risk is concerning, with approximately 45% of its $625 billion cloud backlog tied directly to OpenAI commitments.
- Eroding Market Confidence: As the AI hype shifts towards a competition for bottom-line returns, market confidence in Microsoft's infrastructure ownership has waned, suggesting that mere ownership is no longer a guarantee of investor alpha.
See More
Amazon Teams Up with Microsoft in Bear Market: Reasons Behind the Struggles of Mag 7 Stocks.
Market Reaction: The Magnificent Seven stocks are experiencing a decline due to growing concerns about artificial intelligence rather than the previous optimism surrounding the technology.
Shift in Sentiment: Investors are now more apprehensive about the implications of AI, leading to a downturn in these key tech stocks.
See More
Meta May Consider Stock Split in 2026
- Stock Split Motivation: Meta has yet to execute a stock split despite its stock price rising over 200% in the past three years, currently trading around $670, which may deter some investors due to its psychological price barrier.
- Market Performance Analysis: Although Meta's stock has declined over 6% in the past year, its market capitalization remains at $1.7 trillion, indicating the company's strong position and potential investment appeal in the market.
- AI Investment Priority: Meta has recently focused on enhancing its AI capabilities and infrastructure investments, suggesting that a stock split is not a current priority but may be reconsidered in 2026.
- Future Outlook: Should Meta's stock gain momentum and rise quickly in the coming year, it may contemplate executing a stock split, aligning itself with other tech giants to attract more investors.
See More
Pinterest Price Target Cut to $25 Amid Deteriorating Fundamentals
- Price Target Reduction: Evercore ISI has cut Pinterest's price target from $40 to $25 and downgraded its rating from 'Outperform' to 'In Line', indicating a clear deterioration in the company's fundamentals as revenue growth continues to slow.
- Revenue Growth Deceleration: Pinterest's revenue growth rate fell from 17% in Q2 to 16% in Q3, and further down to 13% in Q4, highlighting the severe challenges the company faces in an increasingly competitive market.
- Market Reaction: Following the Q4 revenue miss against Wall Street expectations, Pinterest's stock dropped over 21% in pre-market trading on Friday, and has declined nearly 33% over the past month, reflecting a significant loss of investor confidence.
- Increased Competitive Pressure: Analysts noted rising competitive intensity from AI-driven rivals like Google and Meta, compounded by the impact of tariffs from the Trump administration on major retailers' advertising budgets, which has further exacerbated Pinterest's market challenges.
See More
Market Focus on CPI Report and Trading Strategies
- CPI Report Impact: The January CPI report is set to be released at 8:30 AM EST, with markets assessing whether inflation is cooling enough to justify future rate cuts, which could lead to volatility in bond yields and the US dollar, subsequently affecting equity performance.
- SPY Trading Dynamics: SPY is currently trading around 680.50, and if the data is favorable, it could quickly push to 682.25, with sustained strength potentially challenging 684.00; conversely, a drop below 680.50 may test 678.75, indicating heightened market volatility.
- Tech Stock Reactions: QQQ is near the psychologically significant level of 600.00, and if it breaks above, it could move towards 603.00 and 605.50; however, a decisive break below 600.00 may lead to a decline towards 597.50, with tech stocks being particularly sensitive to rate changes, increasing volatility.
- Individual Stock Expectations: Apple (AAPL) and Microsoft (MSFT) are trading at 261.50 and 401.50 respectively, and if CPI data supports, they may rise to 263.25 and 404.00; otherwise, they could test 259.75 and 398.75, with market sentiment directly influencing individual stock performance.
See More
Tech Giants' AI Spending Soars Amid Market Jitters
- Surging Capital Expenditure: Hyperscalers like Amazon, Microsoft, Meta, and Alphabet are projected to spend $700 billion on AI this year, surpassing the GDP of countries like the UAE, Singapore, and Israel, indicating a massive commitment to AI investments.
- Market Anxiety: Concerns over the scale of AI spending and potential returns led to a $1 trillion drop in Big Tech market caps last week, and despite a recovery this week, investor confidence in future spending plans remains fragile.
- Increased Borrowing Risks: A UBS report highlights that this year's capex from hyperscalers will consume nearly 100% of operational cash flow, compared to a 10-year average of 40%, raising financial risk for these companies.
- Uncertain Payback Periods: Analysts emphasize that hyperscalers need to achieve significant returns on investment before 2030, but the timelines for these returns remain unclear, potentially causing investor reluctance towards further capex increases.
See More
Microsoft's Surprising Underperformance in Generative AI Sector
- Stock Performance Discrepancy: Since the launch of ChatGPT on November 30, 2022, Microsoft's stock has only risen by 61.26%, from $249.18 to $401.84, significantly lagging behind Meta's staggering 454.07% increase, indicating a lack of market confidence in its AI strategy.
- Capex vs. Revenue Growth: Microsoft is projected to exceed $140 billion annually in capital expenditures for data center expansion, while Meta has successfully integrated AI to enhance its advertising core, achieving a 24% revenue growth by early 2026, highlighting a stark contrast in AI monetization strategies.
- Execution Capability Issues: Analysts have labeled Microsoft's slow integration of new AI models as a “skill issue,” and its high customer concentration risk is concerning, with approximately 45% of its $625 billion cloud backlog tied directly to OpenAI commitments.
- Eroding Market Confidence: As the AI hype shifts towards a competition for bottom-line returns, market confidence in Microsoft's infrastructure ownership has waned, suggesting that mere ownership is no longer a guarantee of investor alpha.
See More
Amazon Teams Up with Microsoft in Bear Market: Reasons Behind the Struggles of Mag 7 Stocks.
Market Reaction: The Magnificent Seven stocks are experiencing a decline due to growing concerns about artificial intelligence rather than the previous optimism surrounding the technology.
Shift in Sentiment: Investors are now more apprehensive about the implications of AI, leading to a downturn in these key tech stocks.
See More
