Meta Platforms, Inc. (META) Is Spending Billions on AI: Will the Bet Pay Off?

Pershing Square Inc. recently released its Q3 2026 investor letter. A copy of the letter can be downloaded here. The letter reported 13% year-over-year growth in third-quarter fee-related earnings (FRE) to $63.7 million, while distributable earnings (DE) before taxes increased 8% to $61.0 million. After taxes, DE totaled $49.5 million, or $0.12 per share, down 12% year over year, primarily due to corporate income taxes following its IPO. Fee-paying assets under management reached approximately $23.0 billion as of September 30, 2026, up 3% sequentially and 4% year over year, with permanent capital representing 98% of the total. The firm said its portfolio companies recorded average quarterly EPS growth of approximately 5% and generated a combined investment return of just over 8%, excluding Howard Hughes Holdings and Fannie Mae and Freddie Mac. Pershing Square expects its portfolio companies to deliver approximately 20% annual EPS growth over the next three to five years. A major focus of the letter was the AI infrastructure buildout. AWS revenue growth accelerated to 39% in Q3, while Meta’s AI-driven advertising improvements and Microsoft’s Azure growth and Copilot adoption strengthened their investment cases. Pershing Square also invested $110 million across seven private companies as part of its planned launch of Pershing Square Ventures. Overall, the firm believes market volatility is creating opportunities to acquire high-quality businesses at attractive valuations. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its third-quarter 2026 investor letter, Pershing Square highlighted stocks like Meta Platforms, Inc. (NASDAQ:META). Meta Platforms, Inc. is a technology company that operates social media and communication platforms, including Facebook, Instagram, WhatsApp, and Messenger. The one-month return of Meta Platforms, Inc. was approximately -16.67%, while its shares traded between $520.26 and $779.82 over the last 52 weeks. On November 2nd, 2026, Meta Platforms, Inc. stock closed at approximately $606.73 per share, with a market capitalization of about $1.55 trillion.

Pershing Square stated the following regarding Meta Platforms, Inc. in its Q3 2026 investor letter:

“Meta Platforms, Inc.’s share price increased 29% during the third quarter and 10% year-to-date. Its core advertising business continues to accelerate with third quarter revenue growth of 26%, as AI-driven improvements in content recommendation and ad targeting lift both engagement and monetization across Meta’s family of apps. The launch of its Muse personal agent and Meta Enterprise Platform during the quarter gave investors a clearer view of how Meta intends to monetize its substantial compute investment beyond the core business. The company’s valuation has increased from 18 times to 22 times forward EPS since the end of the second quarter. We expect Meta to grow earnings at a 20%-plus rate over the next several years and believe the shares remain undervalued given the strength of the core business and the scale of the new market and monetization opportunities enabled by Muse and Meta Enterprise Platform (Click Here To Read The Letter In Detail).”

In another article, we covered Meta Platforms, Inc. and shared the list of best stocks to buy for the next 10 years. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.