Meta Platforms’ (META) Capital Expense Guidance Raised Concerns Over Overspending on AI

In its fourth-quarter 2025 capitalist letter, Baron Durable Advantage Fund highlighted Meta Platforms, Inc. (NASDAQ:META) arsenic a notable detractor from performance. Meta Platforms, Inc. (NASDAQ:META) is simply a exertion institution that develops products to link people. On February 10, 2026, Meta Platforms, Inc. (NASDAQ:META) banal closed astatine $670.72 per share. One-month instrumentality of Meta Platforms, Inc. (NASDAQ:META) was 8.97%, and its shares mislaid 7.54% of their worth implicit the past 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a marketplace capitalization of $1.697 trillion.

Baron Durable Advantage Fund stated the pursuing regarding Meta Platforms, Inc. (NASDAQ:META) successful its 4th fourth 2025 capitalist letter:

"Meta Platforms, Inc. (NASDAQ:META), the world’s largest societal network, detracted from show arsenic shares declined 10.0% during the quarter, though inactive finished 2025 up 13.1%. While Meta reported beardown quarterly results with 25% gross maturation (year-on-year successful changeless currency) and 40% operating margins (both supra expectations) and provided coagulated guardant gross guidance, 2026 superior and operating expenditures guidance was supra Street expectations, raising concerns that it whitethorn beryllium overspending connected AI for little definite returns comparative to competitors. While hyperscalers person an existing unreality business, done which they rent retired GPUs and tin truthful make a short-term instrumentality connected their AI spend, Meta doesn’t person a unreality concern and truthful its concern illustration is longer duration successful nature. Still, we judge Meta continues to payment from its AI investments crossed the halfway business, making improvements successful contented recommendations (with rising clip spent) and successful advertisement targeting and ranking (leading to higher conversions and amended instrumentality connected advertisement spend). Our manufacture checks besides validate beardown advertiser adoption and satisfaction, including successful newer areas specified arsenic easy-to-use AI originative tools and concern messaging. We judge Meta volition statesman to recognize returns from its AI concern oregon rationalize spending implicit time. Longer term, Meta’s enactment successful mobile advertising, monolithic idiosyncratic base, innovative culture, starring generative AI probe and distribution, and technological standard presumption it good for continued performance, with further monetization opportunities up successful areas specified arsenic astute glasses and commerce."