Meta Platforms shares have faced significant pressure in recent trading sessions. Investor anxiety has mounted over the social media giant’s substantial spending on artificial intelligence, driving the stock price downward. However, a fresh analytical perspective from BNP Paribas challenges this prevailing negative sentiment, positioning the current weakness as a potential buying opportunity of considerable magnitude.
Robust Core Performance Overshadowed by AI Debate
Beyond the heated discussions surrounding AI expenditures, Meta’s fundamental advertising business continues to demonstrate impressive strength. Third-quarter revenue surged by 26 percent, exceeding $51 billion. A particularly encouraging sign for shareholders is the dual trend of rising advertising prices coupled with an increase in ad volume, signaling robust and sustained market demand.
The company’s unparalleled scale, with a monthly active user base surpassing 3 billion, provides a formidable competitive edge. This market dominance allows Meta to maintain high profitability even during this costly technological transformation. The firm is also realigning its leadership team; while Chief Revenue Officer John Hegeman is departing, seasoned executives are taking charge of business messaging and AI monetization efforts to cultivate new revenue streams.
Should investors sell immediately? Or is it worth buying Meta?
Analyst Sees Value in Aggressive Spending Strategy
While the broader market views Meta’s escalating capital expenditures with skepticism, BNP Paribas analyst Nick Jones has initiated coverage with a decisive “Outperform” rating. His price target of $800 per share presents a notably optimistic outlook at a time when the stock is trading approximately 22 percent below its 52-week high and has declined considerably following its latest earnings report.
The central controversy revolves around Meta’s aggressive investment policy. Management raised its 2025 capital expenditure forecast to a range of up to $72 billion and signaled even higher spending for 2026. Analyst Jones vigorously defends this strategic direction, arguing that the massive outlays on infrastructure and data centers are essential to secure the company’s long-term competitive position in the AI arena. Without its own cloud computing division, these investments fortify Meta’s economic “moat” against rivals. The underlying thesis suggests that the future returns from these investments will substantially outweigh the present costs.
Current Market Position and Valuation
Emerging from a corrective phase, Meta shares still show a year-to-date decline of nearly 6 percent. However, with a price-to-earnings ratio hovering around 21 and the potential for successful AI integration, the current valuation level may appear attractive to investors with a higher risk tolerance. The critical factor remains whether CEO Mark Zuckerberg can ultimately demonstrate that these multi-billion dollar bets will generate sufficient returns to justify the substantial upfront investment.
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