Does Meta Platforms Need Another Year of Efficiency?

"It's hard to believe, but the Magnificent Seven AI titan has been anything but this year, gaining around 6% while the S&P climbed more than double that year to date. While there have been signs that investors are a bit more willing to warm up to tech (and AI tech) again in recent weeks, it's tough to tell what the next big move will be now that the Mag Seven members aren't moving together anymore."

"For many investors, it's clear that the AI budget is a bit too much to handle, especially amid "AI bubble" fears and the recent reaction by investors to what have been some pretty decent earnings results. Though I do think Zuckerberg and company could please traders by trimming away at the budget going into the new year, I'd argue that it makes very little sense to pull too many levers in response to November market action that may very well prove to be an overreaction."

Meta Platforms shares remain roughly 19% below record highs despite a late-November rally, with recent dips signaling the recovery may be fading. The stock's year-to-date gain near 6% trails the broader S&P performance, driven largely by investor concerns about aggressive AI and AI-infrastructure spending. Some investors fear an 'AI bubble' and want spending restraint, while others argue cutting costs after November could be an overreaction. CEO Mark Zuckerberg's prior 'year of efficiency' is recalled as a potential model. Market watchers consider the weakness a potential buying opportunity for investors seeking value in AI-focused tech.

Read at 24/7 Wall St.