Meta's AI spending spree has even the most bullish stock analysts wondering: How much capex is too much?

"we were obviously too complacent in our investment advice."

"To be crystal clear, we feel that this time is different and that defending the stock - even at this level - is harder because of the ramping of the massive incremental bet that Meta, without a cloud business or pre-existing enterprise assets, has been making in building out a Meta Superintelligence business,"

"Given the outlook, the issue from here is that even with strong top-line expectations, Q4 and 2026 margins will likely compress."

Meta has aggressively expanded AI infrastructure and talent investments alongside Amazon, Microsoft, and Alphabet. Meta's stock declined nearly 20% over the past month after weak earnings on October 29. Heavy AI spending and the absence of a cloud or pre-existing enterprise business increase financial risk as Meta pursues a large-scale Meta Superintelligence effort. Concerns about an AI bubble similar to the dotcom era have emerged. Even with strong top-line expectations, Q4 and 2026 margins are expected to compress. The stock retains a buy rating while the price target was reduced from $875 to $750.

Read at Fast Company