META
Meta's AI bet: expensive now, lucrative later?
Meta is doing the classic Big Tech move: spend like there’s no tomorrow, then tell everyone the future will be so shiny it’ll all make sense. BNP Paribas analyst Nick Jones says that Meta’s AI investments could eventually create “abundant revenue,” and he kept an Outperform rating with an $855 price target.
For investors, the pitch is pretty straightforward. Meta’s not just trying to keep ads humming; it’s trying to build a bigger AI-powered revenue machine that could include:
- stronger core advertising growth
- subscriptions
- a possible cloud offering
- fees from outside customers using Meta’s AI models
The catch: the bill keeps getting bigger
Here’s the part your spreadsheet doesn’t love: Meta’s capital spending is still rising, and Jones thinks it could keep climbing through 2027. That’s a lot of cash out the door before the payoff shows up.
But the bullish case is that Meta’s internal AI tools may make its ads more targeted and more valuable, especially for small and medium-sized businesses that want better personalization without hiring a whole marketing army.
New chips, same old Meta ambition
Meta also plans to start manufacturing its in-house MTIA chips in September, which is a fancy way of saying it wants more control over the AI stack instead of renting the whole thing from Nvidia and friends forever.
Management expects operating income to rise in 2026, though the path won’t be perfectly smooth. Translation: the company is still in spend-now, brag-later mode.
Big picture: Meta is trying to convince Wall Street that its AI bill is really an investment. If the ad machine gets smarter and new revenue streams actually show up, the stock can keep smiling. If not, this starts looking like an extremely expensive science fair.