Meta Platforms, the tech behemoth formerly known as Facebook, has found itself at the center of a stormy debate on Wall Street as investors weigh the promise—and peril—of its massive artificial intelligence (AI) investments. Over the past week, Meta’s stock price has tumbled amid mounting concerns that the company’s aggressive spending on AI infrastructure may be outpacing near-term returns, even as bullish analysts tout the company’s long-term growth potential.

According to The Economic Times, the market’s unease is rooted in what some see as an overheated “AI build-out trade.” Andrew Wells, chief investment officer at SanJac Alpha in Houston, summed up the prevailing mood: “The market’s viewpoint is that the AI build-out trade, and the way they’ve pulled forward all these earnings for many, many years, we think that’s just got too pricey. It’s not that the trade is over, but it got too pricey in pulling forward all these potential future revenues and not really pricing in the risk into all that. So it’s a de-risking trade.”

This sentiment has not been limited to Meta alone. The S&P 500 software and services index dropped nearly 8% over the past week, erasing roughly $1 trillion in market value since January 28, 2026. Data analytics firms such as Thomson Reuters and RELX have also suffered, with RELX shares plunging 17% in their worst week since 2020, as reported by The Economic Times. The market’s anxiety reflects broader fears that the AI revolution could disrupt traditional business models—and that the breakneck pace of investment might not pay off as quickly as hoped.

Meta’s own numbers tell a story of both ambition and risk. As TechStock² reported, the company is projecting capital expenditures between $115 billion and $135 billion for 2026, a staggering increase from the $72.22 billion earmarked for 2025. This spending spree is aimed squarely at building out data centers, servers, and AI chips, all in service of what CEO Mark Zuckerberg has dubbed a sprint toward “personal superintelligence.” Zuckerberg told analysts to expect “a big year” for infrastructure and internal operations, with costs driven higher by third-party cloud charges, increased depreciation from AI data-center assets, and rising infrastructure operating expenses.

Despite these ballooning costs, Meta’s core business remains robust. The company’s fourth-quarter 2025 revenue surged 24% year-over-year to $59.89 billion, and daily active users across Meta’s suite of apps averaged a jaw-dropping 3.58 billion in December 2025. Free cash flow for the quarter stood at $14.08 billion after accounting for costs and investments. Still, the company’s operating margin slipped from 48% in Q4 2024 to 41% in 2025, a decline attributed to the heavier depreciation and research expenses tied to AI integration, as noted by TechStock².

On the bullish side, analysts from the Motley Fool have floated the tantalizing prospect that Meta could join the rarefied ranks of companies with a $4 trillion market capitalization by 2032. To hit that milestone, Meta would need a compounded annual growth rate of 14.2% over the next six years. The Motley Fool article pointed to Meta’s strong momentum and the potential for AI-driven monetization to boost engagement and advertising revenue. The report also cited the company’s revenue guidance for the first quarter of 2026, which is expected to fall between $53.5 billion and $56.5 billion—a nearly 30% increase compared to the same period a year ago, according to Live Mint.

Yet, the path to that $4 trillion club is anything but assured. Meta’s stock has been on a rollercoaster: after closing 1.31% lower at $661.46 on February 6, 2026, the shares have lost 7.8% over the past year, even as they’ve delivered more than 144% returns over the last five years. The stock’s 52-week range has swung from a high of $796.25 to a low of $479.80, with a current market capitalization of $1.67 trillion, as reported by MarketWatch.

Institutional investors have shown mixed reactions. AE Wealth Management LLC increased its holdings in Meta by 4.4% in the third quarter of 2025, bringing its total to 311,172 shares worth about $228.5 million. Other large players like Vanguard Group, State Street Corp, Geode Capital Management, Norges Bank, and Charles Schwab Investment Management have also adjusted their stakes, with institutional and hedge fund ownership now accounting for nearly 80% of Meta’s stock, according to MarketBeat.

Insider activity has been notable as well. Jennifer Newstead and Robert M. Kimmitt, both company insiders, sold shares in late December and mid-January, reducing their holdings by 1.78% and 9.40%, respectively. In total, insiders sold 39,594 shares worth $24.3 million over the last three months. Company insiders retain 13.61% ownership of Meta’s stock.

Analyst sentiment has been largely positive, with many pointing to Meta’s leadership in AI and its ability to scale efficiently. Jim Cramer, for instance, remarked that Zuckerberg has “figured out how to have AI make AI,” underscoring Meta’s progress in automating model development. Bullish perspectives emphasize Meta’s growing monetization of AI through ad redistribution, increased engagement with products like Reels, and the deployment of advanced models such as Lattice and GEM.

However, not all are convinced. Some analysts, like those at Needham, warn of a potential 10–15% downside, citing concerns over valuation and the risks associated with soaring capital expenditures. Legal and regulatory risks also loom, with renewed scrutiny over Meta’s data collection practices and comparisons to past research controversies, as highlighted by MarketBeat.

The broader tech sector has not escaped unscathed. Amazon and Alphabet have reported similarly steep increases in spending, leading to stock price jitters, while Nvidia—supplier of AI chips—has bucked the trend by heading higher. The overall Big Tech sell-off, fueled by fears of an AI spending bubble, has wiped more than $1 trillion from sector values, according to The Economic Times.

Looking ahead, Meta’s fortunes hinge on its ability to translate its massive AI investments into tangible results. Can the company keep ad prices and impressions climbing? Will expenses remain under control as data-center investments accelerate? And will free cash flow hold steady in the face of mounting fixed costs? These are the questions investors are grappling with as Meta’s $135 billion capex figure turns it into a bellwether for the entire industry.

As the dust settles, one thing’s for sure: Meta’s bold AI gamble has put it squarely in the spotlight, for better or worse. The coming months will reveal whether the company’s vision of “personal superintelligence” will justify the price—or if the market’s caution proves prescient.