Meta Platforms is experiencing strong momentum in its social media platforms. Revenue grew 26% year over year in Q3, as Meta is benefiting from AI-driven advertising.
Meta Platforms on Friday said it will invest $600 billion in U.S. infrastructure and jobs over the next three years, including artificial intelligence data centers, as the social media giant races to build infrastructure to power its AI ambitions.
Shares have slumped 17% since the company signaled aggressive AI spending ahead. While some are concerned, others see a prime buying opportunity.
Meta remains an advertising-driven business, leveraging AI primarily for ad targeting and user engagement across its Family of Apps. Meta's significant AI investments lack a direct monetization product, making high CapEx riskier compared to peers like MSFT, AMZN, and GOOG. Despite regulatory headwinds and heavy spending, EBITDA is expected to grow 18% annually, though free cash flow will decline due to CapEx.
Shares dropped by over 11% on Oct. 30 as investors reacted to the company's Q3 2025 earnings and commentary. This was the biggest down move the Magnificent Seven stock has seen after an earnings report since Q3 2022.
Last year, Meta projected that 10% of its overall annual revenue — $16 billion — would come from fraudulent advertisements on its apps, according to a report from Reuters.
Meta projected that 10% of its overall sales in 2024, or about $16 billion, came from running online ads for scams and banned goods, according to a Thursday report from Reuters. That included ads for "fraudulent e-commerce and investment schemes, illegal online casinos and the sale of banned medical products," the report said based on internal Meta documents.
This year, one of the better performers among the Magnificent 7 had been Meta Platforms Inc.
The Motion Picture Association is asking Meta to stop referring to content shown to teen accounts on Instagram as "guided by PG-13 ratings," saying it is misleading and could erode trust in its movie ratings system.
Meta's artificial intelligence spending is giving investors unwelcome flashbacks to 2022, Bloomberg reported Wednesday (Nov. 5). The tech giant's AI efforts are reminiscent of the spending on the metaverse that sent the company's shares tumbling, the report said.
The Motion Picture Association (MPA) has sent Meta a cease-and-desist letter demanding that it stop using the term “PG-13,” as first reported by The Wall Street Journal.
Shares of Meta Platforms Inc. (NASDAQ: META) lost 16.91% over the past five trading sessions after gaining 1.99% the five prior.