Billionaire Ackman Makes Major Investment in Meta
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy META?
Source: Fool
- Major Investment: Ackman's Pershing Square Capital Management has recently invested about 10% of its capital in Meta Platforms, indicating a significant shift towards high-growth AI stocks after exiting positions in Chipotle and Hilton to free up cash for this investment.
- Value Investing Perspective: Despite Meta's forward P/E ratio exceeding 21, Ackman believes the stock price underestimates the company's long-term growth potential in AI, viewing the current valuation as a deep discount for one of the world's leading businesses.
- Capital Expenditure Outlook: Meta's projected capital expenditures could reach up to $135 billion by 2026, primarily for superintelligence development; however, Ackman is not concerned, asserting that the company's financial flexibility can support these investments while its core advertising business remains a cash cow.
- Market Confidence: Ackman's investment is already paying off, with Meta's stock rising 11% in 2025, and among 67 Wall Street analysts, 62 rated the stock as a
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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: 639.770
Low
655.15
Averages
824.71
High
1117
Current: 639.770
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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See More
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- Nvidia Strategic Shift: Nvidia has exited Applied Digital and Arm Holdings while deepening its partnership with Meta by committing to millions of processors, signaling a strategic pivot towards AI and social media that may impact its market share and competitive positioning.
- Tesla Compliance Action: Tesla has avoided a 30-day sales suspension in California after taking 'corrective action' in the marketing of its Autopilot and Full Self-Driving features, which will help maintain its brand image and market position.
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See More
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- Memory Chip Shortage: A persistent shortage of high-bandwidth memory (HBM), DRAM, and NAND chips has led to soaring prices, and experts predict this shortage will continue into 2027, impacting operational costs and profitability for data centers reliant on these components.
- Micron Technology's Revenue Surge: Micron Technology reported record revenue of $13.6 billion in its fiscal 2026 first quarter, a 57% year-over-year increase, with adjusted earnings per share soaring to $4.78, reflecting its strong competitive position in the memory market amid rising demand.
- Optimistic Future Outlook: Micron anticipates second-quarter revenue of $18.7 billion, up 132% year-over-year, and adjusted EPS of $8.42, up 440%, highlighting the company's growth potential driven by AI, despite inherent cyclical risks in the memory market.
See More
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- Surge in Capex: In 2025, major tech companies are projected to spend $360 billion on capital expenditures, with estimates soaring to nearly $600 billion in 2026, reflecting a strong anticipation of AI demand, particularly with Amazon, Alphabet, and Meta budgeting $200 billion, $175 billion, and $115 billion, respectively.
- Memory Shortage Impact: The ongoing shortage of data center memory chips has led to skyrocketing prices, with projections indicating that memory costs could account for 45% of the increase in data center spending in 2026, significantly impacting AI processing capabilities, despite major manufacturers reallocating resources to meet demand.
- Micron's Strong Performance: Micron Technology reported record revenue of $13.6 billion in its fiscal Q1 2026, a 57% year-over-year increase, with adjusted EPS soaring to $4.78, up 167%, showcasing robust profitability amid the memory shortage backdrop.
- Optimistic Future Outlook: Micron anticipates Q2 revenue of $18.7 billion, a 132% year-over-year increase, with adjusted EPS projected at $8.42, up 440%, as management expresses confidence in sustained demand, although the cyclical nature of the memory business remains a risk to monitor.
See More
