The market has been quite unforgiving to the big names in AI, especially those with hefty AI spending plans. As Meta Platforms (NASDAQ:META) looks at more elevated AI expenditures in the new year, the Magnificent Seven darling and one of the more aggressive AI spenders might be poised to stay in the penalty box for a while longer, especially given how quickly sentiment has shifted on AI.

Although CEO Mark Zuckerberg has proven time and time again that his brave bets have paid big dividends, it seems like many investors are losing sight of the long-term opportunity and would rather throw in the towel because, like it or not, AI heavy spenders are out right now.

Get ready for more AI spending in 2026

With heftier expenditures on AI likely in the cards for 2026, as Meta Platforms opportunistically invests in the AI data center while seeking to attract the very best minds in AI to catch up and pull ahead in the AI revolution, the heftier bill (think tens of billions of dollars) is likely to continue to be a concern going into future quarterly earnings reports.

Just how much of the AI spend is going to weigh down what would have been otherwise applaud-worthy results? It’s tough to say, but we might be entering a climate where investors punish excessive AI spend as they did with metaverse spending a while back.

For Meta Platforms, though, the solution is pretty simple: pull back on AI spending a bit to regain investor confidence or give more visibility into how AI is already driving results. In any case, the company has already shown signs of pulling back after reportedly laying off 600 employees from its “bloated” AI unit.

Given the recent cuts and the potential (I think it’s likely) for more to come into the new year as Meta Platforms looks to lean out further, I do think the recent sell-off in Meta Platforms shares is now overdone.

Meta Platforms’ aggressive AI spending pattern might already be priced into the stock

Now down just shy of 25% from its all-time high, it seems like the fears over aggressive AI spend are already well baked into the stock. At the time of this writing, shares of Meta Platforms actually look oversold and undervalued, with the name now going for the lowest price-to-earnings (P/E) multiple in the entire Magnificent Seven.

Of course, there are risks of extreme cash bleed at the hands of AI spend. But could it be that the market is pricing in more aggressive spending in the new year and a lack of further cuts?

I think there’s a strong argument for such, and that leads me to believe that gains could be in the cards if Meta does continue to show signs of lifting its foot ever so slightly off the pedal. Though it’s tough to tell where AI spend heads next, I’d also not rule out a bout of relief should a future quarter reveal that the firm’s aggressive AI spend is paying off.

Given Meta Platforms’ incredible AI monetization capabilities, perhaps more guidance in a future quarter with regard to AI’s effects on growth and margins could cause investors to be more willing to accept Meta Platforms’ higher AI spend. If signs point to the timelier return on AI spend, perhaps the market may be wrong to punish Meta shares so severely for its aggressiveness.

At the end of the day, overhiring and aggressive spending have quick and easy fixes. Now that Meta appears to be in the process of refining its AI workforce, I’d argue that betting against Zuckerberg at a time like this might prove unwise, especially if AI proves to be the “right gamble” as Advanced Micro Devices (NASDAQ:AMD) CEO Lisa Su recently told CNBC.

The bottom line

Sure, Meta is a heavy spender, and that makes its shares seem more vulnerable to an AI bubble bust. That said, the stock trades at 20.5 times forward price-to-earnings (P/E), which doesn’t fit my definition of a bubble. As for the big AI-spending budget, I’d say that Meta has the cash to spend. Personally, I’d much rather trust Zuckerberg’s judgment than some bear who’s simply unfond of AI-related spending.

With many big-name analysts staying bullish on Meta Platform shares amid its descent and one of the most reasonable P/E multiples in all of AI, I think it’s time to have a more constructive view of the name rather than following the herd out of a magnificent company that’s playing the long game on AI.