Meta Misses Opportunity for Stock Split
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy META?
Source: Fool
- Market Performance Review: Over the past three years, the bull market on Wall Street has been led by the 'Magnificent Seven,' which account for over half of all trillion-dollar market cap stocks, with Meta's ten-year return at 539%, the lowest among the group but still surpassing the S&P 500.
- Advertising Revenue Dependency: Meta is projected to derive 98% of its $201 billion net sales from advertising by 2025, linking its performance closely to the health of the U.S. and global economy, where cyclical fluctuations in advertising will impact long-term growth.
- Cash Flow and Investment: By the end of 2025, Meta had $81.6 billion in cash and cash equivalents, generating $115.8 billion in net cash from operating activities, allowing the company to invest aggressively in transformative technologies and growth initiatives without expecting immediate returns.
- Missed Stock Split Opportunity: Despite Meta's share price reaching $716.50 at the start of 2026 and 29.3% of shares held by non-institutional investors, the board's failure to initiate a stock split may restrict retail investor participation, potentially hindering its market cap from surpassing $2 trillion.
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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: 691.700
Low
655.15
Averages
824.71
High
1117
Current: 691.700
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 Doubles Down on AI Investments, Market Responds Favorably
- Earnings Beat: Meta's Q4 2025 earnings report exceeded consensus by approximately $1.3 billion, with a 24% year-over-year increase in advertising revenue, demonstrating the effectiveness of AI investments and boosting market confidence in future growth.
- Capex Plans: CEO Zuckerberg announced plans to increase AI-related capital expenditures to between $115 billion and $135 billion in 2025, surpassing Wall Street's expectation of nearly $111 billion, indicating strong confidence in AI infrastructure.
- Return on Tech Investment: By doubling the number of GPUs used for training its ad ranking model, Meta has enhanced its ad targeting capabilities, which is expected to further drive ad revenue growth, particularly as its video generation tools achieve a $10 billion annual revenue run rate, growing three times faster than the overall ad business.
- Risk Warning: While the market is optimistic about Meta's AI spending, investors should remain cautious of Zuckerberg's history of overextending into other technologies, especially given Reality Labs' cumulative losses exceeding $80 billion, ensuring that AI investments continue to yield returns.
See More
Meta and Zelestra Expand Clean Energy Partnership with New PPA
- Project Launch: The Jasper County Solar project in Indiana has achieved full commercial operations, marking the first project to come online in the partnership between Meta and Zelestra, which is expected to provide significant clean energy supply to the region.
- New Agreement Signed: The companies have signed a long-term Power Purchase Agreement (PPA) for the 176 MWdc Skull Creek Solar Plant in Texas, further advancing Meta's renewable energy initiatives in the state and supporting its goal of 100% clean energy operations.
- Capacity Expansion: Meta and Zelestra now have approximately 1.2 GWdc of solar capacity across seven projects in the US, all scheduled to be operational by 2028, significantly enhancing their competitive position in the renewable energy market.
- Future Construction Plans: With the upcoming construction of two new projects, Zelestra is advancing its position in the US energy landscape, expected to provide innovative solutions to meet the evolving needs of large corporate partners in renewable energy.
See More
Meta Misses Opportunity for Stock Split
- Market Performance Review: Over the past three years, the bull market on Wall Street has been led by the 'Magnificent Seven,' which account for over half of all trillion-dollar market cap stocks, with Meta's ten-year return at 539%, the lowest among the group but still surpassing the S&P 500.
- Advertising Revenue Dependency: Meta is projected to derive 98% of its $201 billion net sales from advertising by 2025, linking its performance closely to the health of the U.S. and global economy, where cyclical fluctuations in advertising will impact long-term growth.
- Cash Flow and Investment: By the end of 2025, Meta had $81.6 billion in cash and cash equivalents, generating $115.8 billion in net cash from operating activities, allowing the company to invest aggressively in transformative technologies and growth initiatives without expecting immediate returns.
- Missed Stock Split Opportunity: Despite Meta's share price reaching $716.50 at the start of 2026 and 29.3% of shares held by non-institutional investors, the board's failure to initiate a stock split may restrict retail investor participation, potentially hindering its market cap from surpassing $2 trillion.
See More
Meta Misses Opportunity to Engage Retail Investors
- Social Media Dominance: Meta's social media platforms attracted an average of 3.58 billion daily users in 2025, significantly outpacing competitors and granting substantial ad-pricing power, yet the board missed the chance to leverage this to engage more retail investors.
- Strong Financial Position: As of 2025, Meta held $81.6 billion in cash and cash equivalents, generating $115.8 billion in net cash from operating activities, allowing the company to invest heavily in transformative technologies without immediate returns.
- Missed Stock Split Opportunity: Since its IPO in 2012, Meta's stock has surged nearly 1,800%, yet it has never executed a stock split, leaving its share price at $716.50, which may restrict retail investor access, despite 29.3% of shares being held by non-institutional investors, indicating a split is overdue.
- Future Investment Plans: Meta plans to spend between $115 billion and $135 billion on capital expenditures in 2026, primarily for AI development, but the lack of a stock split may deter ordinary investors from supporting its ambitious spending, potentially impacting its market performance.
See More
Quarterly Performance Comparison: Microsoft vs Meta
- Microsoft Cloud Performance: Microsoft reported a 39% growth in its Azure cloud computing segment for Q2, surpassing the management's expectation of 37%, indicating strong demand for AI spending; however, despite this excellent performance, the stock fell by about 10%, presenting a potential buying opportunity for investors.
- Meta Capital Expenditure Plans: Meta expects capital expenditures to reach between $115 billion and $135 billion in 2026, a significant increase from $72.2 billion in 2025, raising market concerns about over-leveraging towards AI; however, management reassured that they expect operating income in 2026 to exceed that of 2025, alleviating some market fears.
- Revenue Growth Comparison: Meta's revenue grew by 22% in Q4, reflecting the effectiveness of its generative AI investments, while Microsoft's overall revenue growth was 17%; although both companies performed well, Meta's faster growth may attract more investor interest.
- Valuation Analysis: Microsoft has a forward P/E ratio of 26, slightly higher than Meta's 24, and while the difference is minimal, considering Meta's faster growth and relatively cheaper valuation, investors may lean towards Meta, although Microsoft's long-term growth potential remains strong.
See More
Microsoft Azure Growth Exceeds Expectations, Meta's Capital Expenditure Soars
- Microsoft Azure Performance: Microsoft achieved a 39% growth in Azure for Q2, surpassing the management's expectation of 37%, indicating strong demand for its cloud computing services in AI spending; despite a 10% drop in stock price, this presents a buying opportunity for investors.
- Meta's Capital Expenditure Plans: Meta anticipates capital expenditures between $115 billion and $135 billion for 2026, a significant increase from $72.2 billion in 2025, primarily for data center investments, although concerns about over-leveraging towards AI persist in the market.
- Divergent Market Reactions: Despite Meta's 22% revenue growth in Q4, showcasing the effectiveness of its generative AI investments, its stock still fell by about 10%, contrasting with Microsoft's 20% decline, reflecting differing market expectations for the two companies' future performance.
- Investment Choice Analysis: While Meta's growth rate is higher and its valuation slightly lower than Microsoft's (forward P/E ratios of 24 and 26 respectively), the long-term growth potential of Azure and its steadier revenue stream make Microsoft an attractive option in the investment decision-making process.
See More
Meta Doubles Down on AI Investments, Market Responds Favorably
- Earnings Beat: Meta's Q4 2025 earnings report exceeded consensus by approximately $1.3 billion, with a 24% year-over-year increase in advertising revenue, demonstrating the effectiveness of AI investments and boosting market confidence in future growth.
- Capex Plans: CEO Zuckerberg announced plans to increase AI-related capital expenditures to between $115 billion and $135 billion in 2025, surpassing Wall Street's expectation of nearly $111 billion, indicating strong confidence in AI infrastructure.
- Return on Tech Investment: By doubling the number of GPUs used for training its ad ranking model, Meta has enhanced its ad targeting capabilities, which is expected to further drive ad revenue growth, particularly as its video generation tools achieve a $10 billion annual revenue run rate, growing three times faster than the overall ad business.
- Risk Warning: While the market is optimistic about Meta's AI spending, investors should remain cautious of Zuckerberg's history of overextending into other technologies, especially given Reality Labs' cumulative losses exceeding $80 billion, ensuring that AI investments continue to yield returns.
See More
Meta and Zelestra Expand Clean Energy Partnership with New PPA
- Project Launch: The Jasper County Solar project in Indiana has achieved full commercial operations, marking the first project to come online in the partnership between Meta and Zelestra, which is expected to provide significant clean energy supply to the region.
- New Agreement Signed: The companies have signed a long-term Power Purchase Agreement (PPA) for the 176 MWdc Skull Creek Solar Plant in Texas, further advancing Meta's renewable energy initiatives in the state and supporting its goal of 100% clean energy operations.
- Capacity Expansion: Meta and Zelestra now have approximately 1.2 GWdc of solar capacity across seven projects in the US, all scheduled to be operational by 2028, significantly enhancing their competitive position in the renewable energy market.
- Future Construction Plans: With the upcoming construction of two new projects, Zelestra is advancing its position in the US energy landscape, expected to provide innovative solutions to meet the evolving needs of large corporate partners in renewable energy.
See More
Meta Misses Opportunity for Stock Split
- Market Performance Review: Over the past three years, the bull market on Wall Street has been led by the 'Magnificent Seven,' which account for over half of all trillion-dollar market cap stocks, with Meta's ten-year return at 539%, the lowest among the group but still surpassing the S&P 500.
- Advertising Revenue Dependency: Meta is projected to derive 98% of its $201 billion net sales from advertising by 2025, linking its performance closely to the health of the U.S. and global economy, where cyclical fluctuations in advertising will impact long-term growth.
- Cash Flow and Investment: By the end of 2025, Meta had $81.6 billion in cash and cash equivalents, generating $115.8 billion in net cash from operating activities, allowing the company to invest aggressively in transformative technologies and growth initiatives without expecting immediate returns.
- Missed Stock Split Opportunity: Despite Meta's share price reaching $716.50 at the start of 2026 and 29.3% of shares held by non-institutional investors, the board's failure to initiate a stock split may restrict retail investor participation, potentially hindering its market cap from surpassing $2 trillion.
See More
Meta Misses Opportunity to Engage Retail Investors
- Social Media Dominance: Meta's social media platforms attracted an average of 3.58 billion daily users in 2025, significantly outpacing competitors and granting substantial ad-pricing power, yet the board missed the chance to leverage this to engage more retail investors.
- Strong Financial Position: As of 2025, Meta held $81.6 billion in cash and cash equivalents, generating $115.8 billion in net cash from operating activities, allowing the company to invest heavily in transformative technologies without immediate returns.
- Missed Stock Split Opportunity: Since its IPO in 2012, Meta's stock has surged nearly 1,800%, yet it has never executed a stock split, leaving its share price at $716.50, which may restrict retail investor access, despite 29.3% of shares being held by non-institutional investors, indicating a split is overdue.
- Future Investment Plans: Meta plans to spend between $115 billion and $135 billion on capital expenditures in 2026, primarily for AI development, but the lack of a stock split may deter ordinary investors from supporting its ambitious spending, potentially impacting its market performance.
See More
Quarterly Performance Comparison: Microsoft vs Meta
- Microsoft Cloud Performance: Microsoft reported a 39% growth in its Azure cloud computing segment for Q2, surpassing the management's expectation of 37%, indicating strong demand for AI spending; however, despite this excellent performance, the stock fell by about 10%, presenting a potential buying opportunity for investors.
- Meta Capital Expenditure Plans: Meta expects capital expenditures to reach between $115 billion and $135 billion in 2026, a significant increase from $72.2 billion in 2025, raising market concerns about over-leveraging towards AI; however, management reassured that they expect operating income in 2026 to exceed that of 2025, alleviating some market fears.
- Revenue Growth Comparison: Meta's revenue grew by 22% in Q4, reflecting the effectiveness of its generative AI investments, while Microsoft's overall revenue growth was 17%; although both companies performed well, Meta's faster growth may attract more investor interest.
- Valuation Analysis: Microsoft has a forward P/E ratio of 26, slightly higher than Meta's 24, and while the difference is minimal, considering Meta's faster growth and relatively cheaper valuation, investors may lean towards Meta, although Microsoft's long-term growth potential remains strong.
See More
Microsoft Azure Growth Exceeds Expectations, Meta's Capital Expenditure Soars
- Microsoft Azure Performance: Microsoft achieved a 39% growth in Azure for Q2, surpassing the management's expectation of 37%, indicating strong demand for its cloud computing services in AI spending; despite a 10% drop in stock price, this presents a buying opportunity for investors.
- Meta's Capital Expenditure Plans: Meta anticipates capital expenditures between $115 billion and $135 billion for 2026, a significant increase from $72.2 billion in 2025, primarily for data center investments, although concerns about over-leveraging towards AI persist in the market.
- Divergent Market Reactions: Despite Meta's 22% revenue growth in Q4, showcasing the effectiveness of its generative AI investments, its stock still fell by about 10%, contrasting with Microsoft's 20% decline, reflecting differing market expectations for the two companies' future performance.
- Investment Choice Analysis: While Meta's growth rate is higher and its valuation slightly lower than Microsoft's (forward P/E ratios of 24 and 26 respectively), the long-term growth potential of Azure and its steadier revenue stream make Microsoft an attractive option in the investment decision-making process.
See More
