Jim Cramer Says “Meta Was Harshly Punished for This CapEx Forecast”

Meta Platforms, Inc. (NASDAQ:META) is one of the stocks related to the AI space that Jim Cramer discussed. Cramer noted the stock’s decline after the company reported its earnings and discussed its AI plans. He stated:

“Let’s start with Meta Platforms. Last week, Meta’s stock got pulverized after the company reported a very strong quarter, mainly because they raised their capital expenditures forecast dramatically. Previously, these guys played a shell at 66 to $72 billion on CapEx this year. Now, they say it’s going to be 70 to 72 billion. More importantly, on the conference call, CFO Susan Li, very straight shooter, said our current expectation is that CapEx dollar growth will be notably larger in 2026 than 2025, people were shocked at that, while total expenses will grow at a ‘significantly faster percentage rate’ next year, mostly due to incremental cloud expenses and higher compensation costs because they’re trying to poach a lot of top talent in AI.

And that’s why Meta stock got crushed and continues to get hit… Meta was harshly punished for this CapEx forecast, with its stock plunging 12% last week. Now, I think they got singled out because these numbers are giving investors flashbacks to CEO Mark Zuckerberg’s expensive Metaverse dalliance just a few years ago. That was before we got… cost controls in 2023. Now, look, I think it’s possible that Zuckerberg rolled out that number to show what he’s willing to spend to prevent OpenAI from competing with him on his social turf.”

Photo by Alexander Shatov on Unsplash

Meta Platforms, Inc. (NASDAQ:META) develops technologies and applications that connect people through social networking and messaging. The company’s portfolio includes Facebook, Instagram, WhatsApp, Messenger, Threads, and products in virtual and augmented reality.

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Disclosure: None. This article is originally published at Insider Monkey.