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: 668.690
Low
655.15
Averages
824.71
High
1117
Current: 668.690
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
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
Hyperscalers' Capital Expenditure Soars Amid AI Boom
- Surging Capital Expenditure: Hyperscalers are projected to spend $700 billion on AI this year, surpassing the GDP of countries like the UAE, Singapore, and Israel, reflecting both immense market enthusiasm and inherent risks associated with such investments.
- Market Anxiety: Concerns over the scale of AI spending led to a staggering $1 trillion loss in market capitalization for Big Tech last week; although there has been some recovery this week, investor confidence in future returns remains shaky, contributing to increased market volatility.
- Uncertainty in Returns: Analysts highlight that this year's capital expenditure from hyperscalers will consume nearly 100% of operational cash flow, compared to a 10-year average of 40%, placing greater financial strain on companies and leaving investors anxious about the timelines for return on investment.
- Debt Financing Risks: With Alphabet planning to raise $20 billion through a U.S. dollar bond sale and Oracle aiming to secure $45-50 billion in 2026, analysts warn that this could increase net borrowing among mega-caps, potentially impacting equity holdings and heightening financial risks.
See More
Nvidia's AI Market Outlook Remains Positive
- Investment Surge: Nvidia's stock has soared 1,100% over the past five years, reflecting strong investor confidence in the AI chip market, which has significantly boosted the company's revenue and profit, solidifying its market leadership.
- Giant Spending Plans: Microsoft, Alphabet, Amazon, and Meta plan to invest nearly $700 billion in AI in 2023, indicating sustained high demand for AI products and services, which will directly drive Nvidia's GPU sales growth.
- Strong Market Demand: Cloud service providers like Amazon and Microsoft emphasized in their earnings reports that customer demand exceeds supply, highlighting the urgency of current AI infrastructure builds, which will provide robust support for Nvidia's future earnings growth.
- Sustained Profitability: With a gross margin exceeding 70%, Nvidia is well-positioned to maintain high profitability levels against the backdrop of strong demand in the AI market, further enhancing its competitive edge in the rapidly evolving AI landscape.
See More
Tech Giants' AI Spending Surge Benefits Nvidia
- Total AI Spending: Microsoft, Alphabet, Amazon, and Meta plan to invest nearly $700 billion in AI in 2023, indicating sustained high demand for AI products and services, which is expected to drive Nvidia's earnings growth.
- Amazon's Capital Expenditure: Amazon announced potential capital expenditures of up to $200 billion focused on its cloud business, highlighting its commitment to AI infrastructure and further solidifying Nvidia's position as a GPU supplier.
- Investments from Google and Meta: Alphabet forecasts capital expenditures as high as $185 billion, while Meta pledges up to $135 billion, directly boosting demand for Nvidia's products and driving revenue growth.
- Microsoft's Demand Exceeds Supply: Microsoft CFO Amy Hood stated that customer demand for GPUs and CPUs continues to exceed supply, indicating ongoing investment in AI infrastructure that will further support Nvidia's profit outlook.
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
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
Hyperscalers' Capital Expenditure Soars Amid AI Boom
- Surging Capital Expenditure: Hyperscalers are projected to spend $700 billion on AI this year, surpassing the GDP of countries like the UAE, Singapore, and Israel, reflecting both immense market enthusiasm and inherent risks associated with such investments.
- Market Anxiety: Concerns over the scale of AI spending led to a staggering $1 trillion loss in market capitalization for Big Tech last week; although there has been some recovery this week, investor confidence in future returns remains shaky, contributing to increased market volatility.
- Uncertainty in Returns: Analysts highlight that this year's capital expenditure from hyperscalers will consume nearly 100% of operational cash flow, compared to a 10-year average of 40%, placing greater financial strain on companies and leaving investors anxious about the timelines for return on investment.
- Debt Financing Risks: With Alphabet planning to raise $20 billion through a U.S. dollar bond sale and Oracle aiming to secure $45-50 billion in 2026, analysts warn that this could increase net borrowing among mega-caps, potentially impacting equity holdings and heightening financial risks.
See More
Nvidia's AI Market Outlook Remains Positive
- Investment Surge: Nvidia's stock has soared 1,100% over the past five years, reflecting strong investor confidence in the AI chip market, which has significantly boosted the company's revenue and profit, solidifying its market leadership.
- Giant Spending Plans: Microsoft, Alphabet, Amazon, and Meta plan to invest nearly $700 billion in AI in 2023, indicating sustained high demand for AI products and services, which will directly drive Nvidia's GPU sales growth.
- Strong Market Demand: Cloud service providers like Amazon and Microsoft emphasized in their earnings reports that customer demand exceeds supply, highlighting the urgency of current AI infrastructure builds, which will provide robust support for Nvidia's future earnings growth.
- Sustained Profitability: With a gross margin exceeding 70%, Nvidia is well-positioned to maintain high profitability levels against the backdrop of strong demand in the AI market, further enhancing its competitive edge in the rapidly evolving AI landscape.
See More
Tech Giants' AI Spending Surge Benefits Nvidia
- Total AI Spending: Microsoft, Alphabet, Amazon, and Meta plan to invest nearly $700 billion in AI in 2023, indicating sustained high demand for AI products and services, which is expected to drive Nvidia's earnings growth.
- Amazon's Capital Expenditure: Amazon announced potential capital expenditures of up to $200 billion focused on its cloud business, highlighting its commitment to AI infrastructure and further solidifying Nvidia's position as a GPU supplier.
- Investments from Google and Meta: Alphabet forecasts capital expenditures as high as $185 billion, while Meta pledges up to $135 billion, directly boosting demand for Nvidia's products and driving revenue growth.
- Microsoft's Demand Exceeds Supply: Microsoft CFO Amy Hood stated that customer demand for GPUs and CPUs continues to exceed supply, indicating ongoing investment in AI infrastructure that will further support Nvidia's profit outlook.
See More
