This article talks about the current outlook for Meta stock as the company navigates rising AI capital expenditures, potential market skepticism, and a looming report from Michael Burry on November 25. Investors are weighing whether Meta stock is a buy, hold, or sell heading into 2026.
Meta’s AI Investments and Financial Outlook
Meta Platforms (NASDAQ:META) has been aggressive in expanding its AI initiatives, with 2025 capital expenditures expected to reach 36% of projected revenue of $199 billion. The company is investing heavily to enhance ad targeting, increase engagement, and expand monetization opportunities across its core platforms, including WhatsApp, Instagram, Threads, and Reels.
While the company has reported strong earnings and revenue growth, the market remains cautious. Shares fell below $700 following Q3 2025 earnings, as Meta signaled that 2026 capex would be “notably larger” than 2025. Investors are wary that elevated AI spending, particularly on infrastructure like Nvidia (NASDAQ:NVDA) chips, may pressure short-term earnings.
Michael Burry’s Upcoming Report
Michael Burry, the investor famed for “The Big Short,” has raised concerns about AI-driven tech companies potentially understating depreciation on computing assets. He claims hyperscalers like Meta and Oracle (NASDAQ:ORCL) could overstate earnings by up to 20%–27% by 2028.
Burry plans to release additional details on November 25, which is creating short-term uncertainty around Meta stock. While this may introduce volatility, it’s important to note that these concerns focus on accounting assumptions rather than operational underperformance.
Why Analysts Remain Bullish on Meta Stock
Despite Burry’s warnings, some analysts remain optimistic. Wedbush analyst Dan Ives maintains a $920 price target for Meta stock, describing the stock as a “table pounder” due to its robust AI integration and monetization potential. The company’s AI efforts are enhancing ad performance, boosting engagement, and supporting a steadily growing digital ad business.
Meta’s AI-driven growth has also accelerated Q3 2025 revenue, marking its highest expansion since Q1 2024. Additionally, hardware ventures, like smart glasses, offer potential new revenue streams alongside competitors Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL).
Valuation and Investment Considerations
At a forward P/E of just over 21x, Meta stock remains attractive relative to its growth prospects. While AI capex increases depreciation and may temper short-term earnings, the company has a strong track record of monetizing new products and platforms. Regulatory concerns, such as the FTC antitrust lawsuit, have been largely resolved, removing a significant source of uncertainty.
Investors should weigh short-term risks from AI capex and Burry’s report against long-term growth opportunities. Meta’s entrenched user base, diversified platform ecosystem, and ongoing AI adoption make it a compelling buy for growth-oriented investors.
Conclusion
Although Michael Burry’s November 25 report could introduce volatility for Meta stock, the overall risk-reward balance appears favorable. AI investments, strong digital ad monetization, and emerging hardware opportunities position Meta for sustained growth.
Investors seeking exposure to AI-driven tech with a proven platform may find Meta shares a prudent addition to their portfolios, using current market dips as an entry point while monitoring developments around AI capex and industry scrutiny.
Investors should also keep an eye on Meta’s execution of its AI and hardware strategies. While AI promises to drive higher engagement and revenue, competition from peers like Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) remains intense. Meta’s ability to scale AI effectively, monetize emerging platforms like Reels, Threads, and WhatsApp, and expand hardware adoption will be crucial for long-term performance. For cautious investors, a staggered investment approach could mitigate short-term volatility while capturing potential upside. Ultimately, those who believe in Meta’s AI roadmap and user engagement growth may find the stock well-positioned for the next phase of digital innovation.
Meta’s continued focus on innovation, strategic acquisitions, and global user growth could further strengthen its competitive edge. Long-term investors who remain patient may benefit from compounding returns as AI and digital ad monetization scale.
Featured Image: Megapixl© Viewimage
Author Stephanie Bédard-Châteauneuf 
