Meta’s AI Investment: A Buying Opportunity After Earnings Dip?

Meta Platforms (META) experienced a post-earnings decline after revealing ambitious capital expenditure (capex) plans, sparking investor concern. Despite this, the company's Q1 results showcased a strong revenue beat and EPS outperformance, although adjusted net income benefited from an $8 billion tax benefit. META now projects capex between $125–$145 billion for 2026, shifting the focus to the potential returns on its AI investments.

The analyst raises the price target to $672, based on a 21x multiple applied to $32 in normalized non-GAAP EPS, and identifies technical support around $575. The narrative has shifted to a 'show-me' story regarding AI investment payoffs, requiring Meta to demonstrate tangible results from its substantial spending.