Meta Platforms finds itself navigating a complex landscape where substantial revenue streams intersect with growing regulatory and reputational concerns. A recent investigative report has brought to light that while Chinese advertising clients contribute billions to the company’s coffers, a significant portion of this income may be linked to fraudulent activities. These developments cast a shadow over the quality of the tech giant’s earnings, even as it forges ahead aggressively with new artificial intelligence products and strategic acquisitions.
AI Advancements Counterbalance Ad Scrutiny
Offsetting the focus on its advertising business, Meta’s AI division is generating positive momentum. The company is reportedly preparing to launch a new AI model, internally codenamed “Avocado,” in the first quarter of 2026. This move signals either a rapid evolution of its Llama series or the introduction of a novel, specialized architecture.
Concurrently, Meta is bolstering its hardware ambitions through the acquisition of AI wearable startup “Limitless.” Market observers interpret this as a strategic play to integrate Limitless’s technology into products like the Ray-Ban Meta Smart Glasses, thereby strengthening its foothold in the consumer AI hardware sector.
The Dual Nature of a Multi-Billion Dollar Stream
The core of the current scrutiny stems from a Reuters investigation, revealing a contradictory picture of Meta’s revenue sources. Despite its services being blocked for users within China, Chinese advertisers extensively utilize the platform to target global audiences. In 2024 alone, Meta generated over $18 billion in advertising revenue from China, accounting for more than 10% of its worldwide sales.
Should investors sell immediately? Or is it worth buying Meta?
The critical detail, however, lies in internal documents suggesting that approximately $3 billion of this sum could be connected to “problematic” ads, including fraudulent schemes. The report alleges that management may have hesitated to aggressively tackle these integrity issues to avoid endangering revenue. This introduces a new layer of reputational risk, even though the market’s reaction has so far been muted.
Market Performance and Forward Outlook
Despite the mixed news flow, Meta’s share price has demonstrated stability. Currently trading at 550.90 euros, the equity remains about 22% below its 52-week high from February but appears resilient in the face of recent revelations. Analysts, with a consensus price target of nearly $790, continue to view the current level as attractive, particularly given anticipated profit growth rates through 2027.
For income-focused investors, the near-term focus is the dividend payment scheduled for December 23, 2025. The next pivotal moment for a fundamental reassessment will be the quarterly earnings report on January 28, 2026. This release will indicate whether concerns over ad quality have begun to impact the financials or if seasonal holiday performance and AI investments have outweighed them.
Ad
Meta Stock: Buy or Sell?! New Meta Analysis from January 30 delivers the answer:
The latest Meta figures speak for themselves: Urgent action needed for Meta investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 30.
Meta: Buy or sell? Read more here...
