Meta Platforms’ substantial investments in artificial intelligence have reignited investor enthusiasm, propelling its stock near record highs following a 40% surge since April.
The social media giant recently finalized a $14.3 billion investment in Scale AI while raising its 2025 capital expenditure forecast to $72 billion, signaling unwavering commitment to artificial general intelligence development.
Analysts highlight Meta’s strategic pivot from metaverse speculation to tangible AI applications across its advertising ecosystem. The company’s return on invested capital more than doubled to 31% in Q1 2025, with generative AI tools expected to add 1-2% to annual ad revenue growth. New Street Research projects this impact could reach 4% by 2030 as automated ad creation and targeting systems mature.
“Meta has transitioned from defense to offense in the AI race,” noted Jensen Investment Management’s Allen Bond, contrasting the company’s position with Alphabet’s defensive posture against AI disruptors. The Global X Artificial Intelligence & Technology ETF’s 32% gain since April underscores renewed sector optimism, though Meta’s 24.5 forward P/E ratio suggests valuation discipline persists despite the rally.
With nearly 90% of analysts maintaining buy ratings, Meta’s AI gamble appears validated for now, though Carnegie Investment’s Greg Halter cautions that the stock’s risk-reward profile has become more balanced after its recent run.
