Meta Platforms is making a bold $2 billion bet on its future by acquiring the artificial intelligence startup Manus. This move is central to CEO Mark Zuckerberg’s strategy of embedding AI tools for small and medium-sized businesses. However, this strategic play is encountering significant headwinds, casting a shadow over the company’s near-term trajectory. Investors are now assessing the impact of emerging operational snags and geopolitical scrutiny on Meta’s growth narrative.
Regulatory Scrutiny Clouds Major Acquisition
The market’s initial enthusiasm for the Manus deal has been tempered by reports from the Financial Times indicating that Chinese regulatory bodies have initiated a review of the transaction. Authorities are reportedly investigating potential breaches of technology control regulations. This development introduces a substantial geopolitical execution risk into Meta’s core AI strategy, raising concerns about potential regulatory interventions.
This uncertainty has weighed on investor sentiment, contributing to the stock’s recent underperformance relative to the Nasdaq 100 index. In the latest trading session, Meta shares closed at $648.69, marking a decline of approximately 1.8 percent.
Supply Constraints and Legal Reinforcement
Simultaneously, Meta is navigating unexpected supply chain challenges. The international rollout of its popular Ray-Ban Smart Glasses has been temporarily halted. Ironically, the reason is a positive one: demand in the U.S. market has been so robust that it has depleted inventory. While this strong uptake bodes well for long-term product acceptance, it effectively caps short-term revenue growth for the hardware segment outside the United States.
Should investors sell immediately? Or is it worth buying Meta?
In response to an increasingly complex global regulatory environment, Meta is bolstering its executive team. The company has appointed C.J. Mahoney, a former Microsoft executive and former deputy U.S. Trade Representative, as its new Chief Legal Officer. Market observers interpret this hire as a deliberate move to professionally navigate antitrust challenges and the ongoing review of the Manus acquisition.
Soaring Expenditures and Analyst Perspectives
Financially, Meta’s price-to-earnings (P/E) ratio of approximately 28.6 may appear reasonable for a growth-oriented company. However, attention is sharply focused on its escalating capital expenditures. Analysts project that investments in AI infrastructure expansion could drive capital spending (CapEx) to as high as $111 billion by 2026. This aggressive outlay raises pertinent questions about the near-term trajectory of the company’s free cash flow.
Despite these concerns, expert outlooks remain largely favorable. Firms including Rosenblatt have reaffirmed their buy ratings, with price targets reaching up to $1,117. Jefferies maintains a target of $910. From a technical analysis standpoint, the equity is currently testing a support level around $644. The upcoming quarterly report on February 4, 2026, is viewed as a critical event that could provide much-needed clarity on the company’s ambitious spending roadmap and set the stock’s near-term direction.
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