Meta Platforms (META) just put its foot on the gas for AI, sharply lifting its 2026 capital expenditure forecast and pausing share buybacks, a move that has quickly split opinion among investors.

See our latest analysis for Meta Platforms.

The share price has cooled recently, with a 30 day share price return down 9.25% and year to date share price return down 5.56%. Even so, the 3 year total shareholder return is 152.02% and the 5 year total shareholder return is 95.76%. This shows long term holders have still seen strong compounding despite current debate around heavier AI spending and paused buybacks.

If Meta’s AI push has your attention, it can be useful to see what else is shaping the space and scan 42 AI infrastructure stocks

With Meta trading at US$614.23 and screens flagging an implied 17% intrinsic discount plus a roughly 35% gap to analyst targets, the key question is simple: is this AI spending reset a chance to buy, or is the market already pricing in the growth story?

Most Popular Narrative: 15.1% Undervalued

According to the most followed narrative, Meta’s fair value of $723.11 sits well above the last close at $614.23, which frames the current AI spending shift in a different light for long term investors.

Meta’s Q3 2024 results present a company aptly juggling growth, efficiency, and investing for the future. Prudent cost management and strategic geographic expansion underlined its resilience in the core ad business. Meanwhile, Meta continues to invest heavily in AI and the metaverse, a premeditated risk to secure its position at the forefront of the next wave of digital innovation. Though significantly high losses at Reality Labs in the near term are considered a challenge, this might be a part of Meta’s long-term vision to redefine the future of social media and digital interaction.

Read the complete narrative.

Curious what assumptions sit behind that $723.11 figure? The narrative leans on robust ad cash flows, healthy margins, and a premium future earnings multiple that is not visible in the headline numbers.

Result: Fair Value of $723.11 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, that story can be tested quickly if heavy AI and Reality Labs spending pressures margins, or if rising legal and regulatory scrutiny reshapes how Meta runs its platforms.

Find out about the key risks to this Meta Platforms narrative.

Another View: Higher P/E, Different Message

DCF points to Meta trading about 17.3% below an estimated fair value of $742.96, yet the P/E story is less relaxed. At 22.1x earnings, the stock sits well above the US Interactive Media and Services industry at 12.6x, although below peer average at 29.6x and a fair ratio of 38.1x. For you, the tension is simple: is this a quality premium worth paying or a sign that expectations already run high?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

There are clearly differing views on Meta. If you want to act quickly and consider all available information, review the 4 key rewards and 1 important warning sign

Looking for more investment ideas?

If Meta is already on your watchlist, consider broadening your opportunity set with a few focused stock ideas that fit different portfolio goals.

• Target potential mispricings by scanning 50 high quality undervalued stocks that combine solid fundamentals with prices that screens suggest may sit below their implied worth.
• Strengthen your income stream by reviewing 12 dividend fortresses that pair higher yields with characteristics that can support ongoing cash distributions.
• Prioritise resilience by checking 66 resilient stocks with low risk scores that feature lower risk scores and may help balance out more aggressive positions.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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