Arete Downgrades Meta (META) Over AI Spending Concerns

Meta Platforms Inc (NASDAQ:META) is among the 11 best robotics stocks to buy right now.

On March 5, analysts at Arete downgraded their rating on Meta Platforms Inc (NASDAQ:META) to Neutral from Buy, while also lowering the price target on the social media giant’s stock to $676 from $732. In its research report, Arete noted its worries that Meta’s heavy investment in AI infrastructure may begin to weigh on profitability, even as the company pushes aggressively into the technology.

According to the firm, Meta’s spending trajectory is rising quickly while revenue growth is not keeping pace, a trend that could pressure margins. Notably, the company previously said it expects to spend between $115 billion and $135 billion in 2026, significantly higher than the $72.2 billion in capital expenditure in 2025, factoring into Arete’s concerns about the stock.

Arete Downgrades Meta (META) Over AI Spending Concerns

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Meta Platforms Inc (NASDAQ:META) appears to be falling behind peers as companies like Alphabet and Amazon command a large share of third-party demand for their cloud services, according to Arete, which also noted that the company’s efforts to pour significant resources into AI-related development and infrastructure have yielded limited financial returns so far.

Meta Platforms Inc (NASDAQ:META) engages in the development of social media applications to help people connect and share, find communities, and grow businesses, as well as augmented, mixed, and virtual reality-related consumer hardware, software, and content.

While we acknowledge the risk and potential of META as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than META and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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