META's Big Earnings Beat Overshadowed by Soaring AI Spending

Meta Platforms, Inc. (NASDAQ:META) is one of the AI Stocks in the Spotlight This Week. On October 30, TD Cowen lowered its price target on the stock to $810 from $875 while maintaining a Buy rating.

The price target adjustment follows Meta’s Q3 results, where the tech giant reported revenue and operating income exceeding consensus estimates by 4% and 5% respectively.

Despite this robust Q3 beat and upbeat Q4 outlook, the company’s rising AI capex/opex has tempered near-term margin view. TD Cowen noted how Meta has raised both its 2025 capital expenditure and operating expense guidance.

“Strong 3Q Results Overshadowed By Ramping AI Infrastructure Spend; META 3Q rev & Op Inc. were +4% & +5% vs cons ests on strong pricing & volume growth. 4Q rev guide was 3% above cons est (high end) amid AI-driven gains to engagement & monetization engines. Mgmt. raised ’25 capex & opex guides, and now expects accel’ing ’26 opex growth & higher y/y dollar capex growth amid ramping compute. We raised opex & capex outlook; PT to $810, maintain Buy, shares (6%) AH.”

Meta Platforms has been expanding its advertising capabilities and also invests heavily in artificial intelligence and the metaverse.

While we acknowledge the potential of META as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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