Meta Stock Price Forecast - META at $624: Discounted AI Giant or Value Trap After the $796 Peak?

NASDAQ:META – AI Capex Overhang Versus a 40%-Margin Ad Cash Machine

Price, range and valuation snapshot for NASDAQ:META

NASDAQ:META trades around 624–625 dollars, with the last print at 624.48 dollars, down 17.49 dollars on the day from a previous close of 641.97 dollars. The intraday range runs between 624.31 and 642.27 dollars, against a 52-week range of 479.80 to 796.25 dollars, so the stock now sits roughly 21 percent below the 796.25 dollar high and about 30 percent above the 479.80 dollar low. Market capitalization stands near 1.58 trillion dollars, with a trailing P/E ratio of 27.65 and a cash dividend yield of about 0.34 percent. Using 2026 EPS estimates of roughly 30.42 dollars, NASDAQ:META trades at about 20.5 times forward earnings. If you adjust for Reality Labs losses that currently cut EPS by roughly 5.50 dollars and assume a “core” EPS around 36 dollars, the implied core multiple drops to roughly 17.3 times. One of the articles pegs the forward P/E at 22.2 times, still below many of the other “Magnificent Seven”: NVIDIA around 26.6, Apple near 31.0, Alphabet about 28.3, Amazon roughly 30.7, Microsoft near 27.6 and Tesla far above 200. In other words, the market is already discounting Meta’s heavy AI and Metaverse spending versus its large-cap tech peers.

Revenue, margins and cash flow power behind NASDAQ:META

Recent quarterly revenue sits at about 51.24 billion dollars, up 26 percent year over year from roughly 40.7 billion dollars, versus Wall Street expectations close to 49.41 billion and about 22 percent growth. That is roughly 1.8 billion dollars of top-line upside and four percentage points of growth surprise in a single quarter. Consensus now expects 2026 revenue around 235 billion dollars and 2027 revenue near 272 billion, adding roughly 72 billion dollars over two years, equal to almost 30 percent growth from the 2025–2026 base. Operating margins in the core ad business are still around the 40 percent zone even after AI, data center and Reality Labs drag, which keeps Meta among the most profitable scaled platforms in the market. On a trailing twelve-month basis Meta generated about 42.7 billion dollars of free cash flow after spending roughly 62.6 billion dollars in capex. In the latest reported quarter operating cash flow was about 30.0 billion dollars, up 21 percent year over year, while free cash flow was 10.6 billion dollars, down 32 percent because capex more than doubled versus the prior year. That profile – more than 40 billion dollars in free cash flow after over 60 billion in capex – is what underwrites the balance sheet and gives NASDAQ:META room to run an aggressive AI build-out without external funding.

Ad volumes, pricing and regional mix driving NASDAQ:META growth

Ad impressions across the Meta family of apps rose about 14 percent year over year in the latest quarter, an acceleration from 11 percent growth in the prior period. Asia-Pacific impressions grew about 23 percent, while the United States and Canada maintained high single-digit impression growth on a much larger revenue base that already accounts for roughly 43 percent of total sales. At the same time, average ad prices increased approximately 10 percent year over year, up from 9 percent in the previous quarter, with U.S. and Canadian pricing gaining about two additional percentage points. The combination of mid-teens impression growth and double-digit pricing translated into the 26 percent revenue growth to 51.24 billion dollars. This is happening in an advertising environment that is still constrained by macro uncertainty, not in a boom year. Around 60 billion dollars of ad spend is already flowing through Meta’s AI-powered ad tools, reinforcing the link between AI targeting, higher advertiser return on ad spend and Meta’s ability to raise average prices. If Meta can sustain even high-single-digit pricing growth and low-teens impression growth, you are looking at a structural path toward mid-teens to high-teens revenue growth for the ad business before any incremental contribution from newer surfaces.

User scale, engagement and surface expansion inside NASDAQ:META

Daily and monthly active users are still climbing at low single-digit rates from an already enormous installed base in the multi-billion range. More important now is engagement per user and the number of monetizable surfaces. Internal data cited in the sources indicates about a 5 percent increase in time spent on Facebook and a roughly 30 percent jump in time spent on Threads, driven by AI-enhanced recommendation algorithms. Reels continues to receive more ad inventory, and WhatsApp – historically a zero-revenue messaging product – has begun to monetize through ads and business messaging, opening a new multi-billion dollar path on top of the existing Facebook and Instagram franchises. Threads demonstrates that Meta can still launch and scale products against newer social competitors, and WhatsApp remains the default messaging infrastructure across Europe, India, much of Latin America and large parts of emerging markets. With this footprint, Meta can increase ad load by a few percentage points across multiple products without triggering meaningful churn, and can push ad budgets toward where attention is moving – Reels, Stories, short-form video and messaging – while maintaining the overall user base. That ecosystem scale is a core part of the NASDAQ:META equity story and helps support premium ad pricing.

Reality Labs inside NASDAQ:META – losses, cuts and smart-glasses optionality

Reality Labs currently burns more than 17 billion dollars per year, with total cumulative losses already exceeding 73 billion dollars and likely approaching 95 billion dollars by the end of 2026 if there were no adjustments. Management is reportedly planning to reduce Reality Labs expenditures by roughly 30 percent. A 30 percent cut on a 17 billion dollar annual loss base implies savings of about 5.1 billion dollars per year. With one of the analyses estimating that Reality Labs currently subtracts about 5.50 dollars from EPS, trimming losses by 30 percent would likely add around 1.5–2.0 dollars per share back into earnings, pushing 2026 EPS from roughly 30.42 dollars toward the 32–33 dollar range. Full elimination of Reality Labs losses would add the full 5.50 dollars, lifting EPS near 36 dollars. At the current 624.48 dollar share price that would imply a core business P/E closer to 17.3 times instead of 20.5 times. On the product side, smart glasses are starting to show real traction. The ultra-premium Ray-Ban Display model is priced around 799 dollars and has sold approximately 15,000 units so far, which translates to about 12 million dollars of revenue on that specific SKU alone. Meta has pushed EssilorLuxottica to ramp capacity toward 10 million units of a 300 dollar Ray-Ban version in 2026. If Meta ultimately ships even 3–5 million pairs at blended average selling prices between 300 and 500 dollars, that would add roughly 900 million to 2.5 billion dollars of annual revenue, cutting into the division’s burn. Those numbers do not repair a 17 billion dollar loss on their own, but they show that Reality Labs has early revenue seeds rather than being a pure zero-revenue sink.

AI posture of NASDAQ:META – internal monetization versus public ranking

Public traffic metrics show Meta’s generative AI tools lagging Google’s Gemini, OpenAI’s ChatGPT and even newer entrants such as Grok, Perplexity and Claude in terms of user visits and engagement. That is why the “AI leader” premium that pushed NASDAQ:META toward 780–800 dollars has partly evaporated, leaving the stock now oscillating around the mid-600s area. Inside the company, the narrative is very different. Meta is preparing to launch the Avocado large language model and the Mango image model after acquiring Scale AI and talent from OpenAI, and it has already embedded AI into all its key monetization loops. Around 60 billion dollars of ads are flowing through AI-powered tools, ad pricing is up 10 percent year over year, impressions are up 14 percent and engagement – such as time spent on Threads – is up 30 percent. That is clear, measurable monetization of AI investment. The strategic risk is not that Meta lacks AI capability. The real risk is the slope of incremental return: whether lifting annual capex from 71 billion dollars in 2025 toward 100–110 billion dollars in 2026 and beyond will generate enough incremental revenue and profit to justify those additional tens of billions in capital. Meta has the option, highlighted in one of the pieces, to pivot toward external AI models if internal infrastructure fails to hit return thresholds, in the same way it can dial down Reality Labs spending when it becomes clear the ROI profile is unacceptable.

Capex wave and infrastructure build under NASDAQ:META

For 2025 Meta raised guidance for capital expenditures to 70–72 billion dollars, up from the previous 66–72 billion dollar range. The CFO has already warned that “capex dollar growth will be notably larger in 2026 than 2025,” which implies that 2026 capex will likely exceed 100 billion dollars. One of the analyses projects a 30 billion dollar year-over-year increase from the 71 billion dollar midpoint, pointing toward a 2026 range in the 101–110 billion dollar zone. On top of that, Meta has signed several large cloud infrastructure deals for AI workloads that do not appear in capex but rather in operating expenses. Even with this heavy investment, trailing capex is 62.6 billion dollars and trailing free cash flow is still 42.7 billion dollars, meaning Meta is covering its expansion with internally generated cash. In Q3 alone the company reported 30.0 billion dollars of operating cash flow, 10.6 billion dollars of free cash flow and more than 40 percent underlying operating margins in the ad segment. The newly created “Meta Compute” division, headed by the existing infrastructure chief, is explicitly responsible for allocating this capital across data centers and compute in a more structured way. The key for equity holders is the duration of this elevated spend. Most commentary suggests 2026 and 2027 are peak capex years, after which capex growth should converge back toward revenue growth or below. If that happens, depreciation will lag capex and free cash flow could expand rapidly as the capex curve flattens.

Valuation context and peer comparison for NASDAQ:META

One of the detailed valuations in the material sets Meta’s forward P/E near 22.2 times based on adjusted EPS, versus forward P/E ratios of 26.6 for NVIDIA, 31.0 for Apple, 28.3 for Alphabet, 30.7 for Amazon, 27.6 for Microsoft and roughly 204 for Tesla. On a trailing basis Meta’s P/E is 27.65 at a 624.48 dollar price. On an adjusted trailing basis that normalizes for a one-time tax hit, the P/E drops toward 22.7, marginally below both its own 10-year average and the S&P 500 average multiple. The price-to-operating-cash-flow multiple sits around 15.1 versus a 10-year average roughly 15 percent higher, giving some room for mean reversion if growth and margins stabilize. Analysts are modelling very modest EPS growth for 2026 because both R&D and capex are absorbing a lot of incremental dollars. R&D alone has climbed to about 30 percent of revenue, a level Meta has not seen in the last couple of years, and total expenses are guided to grow faster in 2026 than in 2025. If you assume EPS grows only from roughly 29 adjusted dollars today to 30–31 dollars next year, the multiple may look full at first glance. But if you use a 3–5 year horizon and assume EPS can compound in the mid-teens once capex normalizes and Reality Labs losses compress by even 30–50 percent, the effective PEG ratio becomes attractive relative to other large-cap AI plays.

Risk profile for NASDAQ:META at current levels

The central risk is capital allocation. If Meta pushes capex into the 100–110 billion dollar range in 2026 and then keeps capex and AI-related expenses elevated through 2027 without demonstrating a clear link to incremental revenue and earnings, the expected 2026 EPS near 30.42 dollars could prove too optimistic. Free cash flow could remain stuck in the 30–40 billion dollar band instead of climbing back toward 50–60 billion dollars, and the market could force the P/E down from 20–22 times toward the mid-teens, which would imply share prices closer to the 500–550 dollar range rather than the current 620–640 dollar band. Reality Labs remains a swing factor. If losses do not come down from the 17+ billion dollar annual level and continue to build towards the 95 billion dollar cumulative mark, investors will increasingly see that spend as permanently dilutive rather than strategic. Classic risks around regulation, privacy enforcement, antitrust actions and content moderation remain. Stricter data-usage rules can reduce targeting efficiency and soften the 10 percent ad price growth that currently supports revenue. Competition from TikTok, Snap and regional platforms can erode engagement in younger cohorts or specific markets. A cyclical downturn across the United States, Europe or major emerging economies would hit both ad volume and pricing simultaneously, pressuring the 40 percent core margins. None of these risks are new, but they all become more important when Meta is layering tens of billions of fixed cost onto its structure.

Equity stance on NASDAQ:META – buy, sell or hold with all numbers on the table

With NASDAQ:META trading around 624.48 dollars, about 21 percent below the 796.25 dollar high and roughly 30 percent above the 479.80 dollar low, the stock offers a blend of visible cash-flow strength and AI-driven uncertainty. The company is generating around 51.24 billion dollars of quarterly revenue at 26 percent growth, roughly 42.7 billion dollars of annual free cash flow after 62.6 billion dollars in capex, and holds a 1.58 trillion dollar market cap with a 27.65 trailing P/E and forward figures between 20 and 22 times. Adjusting for potential 30 percent cuts to Reality Labs, that multiple on core earnings drops into the high-teens, while the ad engine continues to deliver around 14 percent impression growth and 10 percent pricing growth, with about 60 billion dollars of spend flowing through AI tools and engagement gains of 5 percent on Facebook and 30 percent on Threads. Capex is set to ramp from the 70–72 billion dollar range in 2025 toward 100+ billion dollars in 2026, but Meta has shown it can still produce more than 40 billion dollars of free cash flow under that burden. If management executes on Reality Labs cuts and proves that 2026–2027 mark the peak of the AI infrastructure cycle, both EPS and free cash flow should inflect upward as capex normalizes, providing room for re-rating from the 20–22 times P/E band. With that combination of numbers and the current discounted valuation versus other AI mega caps, the balance of evidence points clearly in one direction.

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