Is Meta's AI Spending Spree Reckless or Genius?
2026-06-03 06:21:00 ET
While the tech sector as a whole has been on a tear, Meta Platforms (NASDAQ: META) hasn't followed suit. The leading social media stock is down 21% from its all-time high of $796 last August (as of May 29).
The main reason behind the slump is artificial intelligence (AI) spending. Meta's last three quarters have followed the same pattern: management raises capital expenditure (capex) guidance, investors get worried, and the share price drops. Most recently, Meta announced plans of $125 billion to $145 billion in capex in 2026, up $10 billion from previous guidance.
Critics have compared these spending plans to Meta's big bet on the metaverse, which ended up being a high-profile failure. But there's a lot that this comparison misses.
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