Meta Platforms (META) saw its stock price rise by approximately 13% in 2025, yet it underperformed the S&P 500 index, which gained 16% over the same period. The primary reason was the market’s negative reaction to its third-quarter earnings report, which led to a decline in the stock price in October and sustained pressure thereafter. Currently, its share price is down about 16% from its all-time high. If this adjustment stems from short-term market sentiment, it may present a potential buying opportunity for investors.
As the parent company of social media platforms such as Facebook, Instagram, and Threads, Meta’s core business model relies on advertising revenue. With the deep integration of artificial intelligence technology, this business is becoming more robust and efficient. Currently, investors are more focused on Meta’s substantial spending plans. The company has historically been willing to invest heavily in its strategic direction, from its earlier high-profile investments in the metaverse to its current focus on building AI data centers. Company guidance further indicates that capital expenditure growth in 2026 will be significantly higher than in 2025, with an estimated total of at least $100 billion. This implies that nearly all of the company’s approximately $110 billion in annual operating cash flow could be directed toward AI infrastructure construction in the coming years. This aggressive investment pace has raised market concerns about its financial burden and the uncertainty of returns, which was a major factor behind the stock price decline following the third-quarter earnings report.
Despite the high expenditures, Meta’s core advertising business is solidly grounded and possesses strong cash flow generation capabilities. Although massive capital expenditures may compress profits in the short term, the potential long-term benefits from AI—including enhanced advertising effectiveness, the development of new revenue streams, and the strengthening of technological moats—could be sufficient to offset the current investments. Even if related projects fail to fully meet expectations, the company retains the ability to return to its high-cash-flow core business. Therefore, for long-term investors, the market’s short-term negative reaction may obscure the long-term value. Meta’s strong fundamental business, combined with its strategic bets on cutting-edge technology, could make it a successful long-term investment.
To support its AI ambitions, Meta has recently taken significant steps in securing energy supply. The company announced plans to secure up to 6.6 gigawatts of nuclear power supply by 2035, marking one of the most extensive and ambitious collaborations between a U.S. tech giant and nuclear power suppliers. Specific agreements include: purchasing over 2,600 megawatts of power from three existing nuclear plants operated by Vistra in Ohio and Pennsylvania; supporting Oklo in constructing a 1.2-gigawatt power park in Ohio; and funding TerraPower to develop two new reactors, while securing priority purchasing rights for power from up to six of its flagship reactors. These long-term power purchase agreements aim to provide stable, clean electricity for data center operations, directly supporting Mark Zuckerberg’s vision of investing hundreds of billions of dollars in AI research and development and computing infrastructure by the end of this decade. This move also highlights that stable and efficient energy supply has become a critical strategic resource in the AI race.
