"The market has been quite unforgiving to the big names in AI, especially those with hefty AI spending plans. As Meta Platforms ( NASDAQ:META) looks at more elevated AI expenditures in the new year, the Magnificent Seven darling and one of the more aggressive AI spenders might be poised to stay in the penalty box for a while longer, especially given how quickly sentiment has shifted on AI."
"With heftier expenditures on AI likely in the cards for 2026, as Meta Platforms opportunistically invests in the AI data center while seeking to attract the very best minds in AI to catch up and pull ahead in the AI revolution, the heftier bill (think tens of billions of dollars) is likely to continue to be a concern going into future quarterly earnings reports."
Meta Platforms is planning increased AI expenditures in 2026, investing aggressively in AI data centers and talent to catch up and pull ahead in AI. Heavy AI spending could amount to tens of billions and may pressure future quarterly earnings and investor sentiment. Market sentiment has shifted to penalize large AI spenders, following earlier reactions to metaverse spending. The company has begun cutting costs, reportedly laying off 600 employees from its "bloated" AI unit, and may undertake further reductions. Options include modestly reducing AI spending or providing clearer visibility into how AI is driving results to restore investor confidence. Shares have fallen significantly from their highs.
Read at 24/7 Wall St.
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