Meta stock slides amid $145B capital-spending push

Meta Platforms’ shares have fallen from a record $796 in August to about $562 after the company raised its capital spending estimate to more than $145 billion.

That capex increase, up from an earlier estimate of $125 billion, is mainly tied to higher data-center costs and rising chip prices amid a global shortage.

Company management has said the spending is intended to strengthen Meta AI and the company’s infrastructure, though Meta AI holds a smaller share of the conversational AI market compared with leading competitors.

In the first quarter, Meta reported revenue of $56 billion, a 33% year-over-year increase, and an operating margin of 41%. The company finished the quarter with more than $81 billion in cash and marketable securities.

Meta has indicated plans to raise more than $80 billion through a mix of debt and equity.

Usage data show ChatGPT with the largest share in conversational AI, followed by Google’s Gemini and Anthropic; Meta AI and other tools occupy smaller portions of the market.

Analysts project roughly 25% revenue growth for the current year and about 19% for the next. Meta’s forward price-to-earnings ratio is near 17, below its five-year average of about 22.

Technical charts show the stock slipped below a support near $630, the 23.6% Fibonacci retracement level from the August peak, and under the 50-week exponential moving average. Chartists note a head-and-shoulders pattern and declines in the Relative Strength Index and MACD.

Some technical analysts expect a test of the $450 area, while others point to a possible recovery later in the year if sentiment or fundamentals improve.

Meta owns Facebook, Instagram and WhatsApp. Management points to WhatsApp monetization and AI-driven products as sources of future revenue. Investors are split over whether the higher capital commitments will deliver the expected returns.