Meta Platforms (NASDAQ: META) stock has fallen 24% from its recent high, raising questions about whether the pullback represents a buying opportunity for investors.
The decline comes as investors grow increasingly anxious about the company’s aggressive capital expenditure plans tied to artificial intelligence infrastructure buildout.
Among 71 analysts covering the stock, Meta carries a median target price of $815 per share, implying 36% upside from its current share price of $598.
Meta raised its 2026 capital expenditure forecast to $135 billion at the midpoint, up from $125 billion, nearly double the $72 billion spent in 2025.
That 2025 figure itself was nearly double the $39 billion in capex spending from 2024, signaling an escalating financial commitment to AI development at the company.
Meta owns the three most popular social media platforms by monthly active users: Facebook, WhatsApp, and Instagram, giving it a powerful advertising foundation.
In the first quarter, ad impressions delivered across its social media properties increased 19%, while the average price per ad climbed 12%, reflecting stronger user engagement.
Bloomberg has reported that Meta is planning to rent out excess compute capacity to customers, effectively creating a neocloud business similar to CoreWeave, though Meta has not publicly commented on the report.
Wall Street consensus estimates call for second-quarter revenue to increase 26% to $60.1 billion, while earnings are expected to grow less than 1% to $7.22 per share.
Options pricing information as of July 27 implies a 7% move in Meta stock, either higher or lower, following the second-quarter financial results announcement.
Meta beat estimates in the first quarter, but the stock still dropped 9% the following day after the company raised its capex outlook, illustrating how management commentary can overshadow headline numbers.
Alphabet similarly saw its stock drop after a strong financial report, simply because the company raised its own capex forecast, suggesting the market remains sensitive to AI spending signals.
Wall Street expects Meta’s earnings to increase at 22% annually over the next three years, which makes the current valuation of 21.5 times earnings appear attractive by historical standards.
Those metrics produce a price-to-earnings-to-growth ratio slightly below 1, a level typically interpreted as indicating a stock is undervalued, and Meta’s PEG ratio sits at its lowest point in three years.
Investors watching the July 29 earnings report will be looking closely for updates on AI monetization, including developments around Meta AI, which recently added shopping mode and task automation features.
