Meta Stock Faces Pressure from Rising AI Costs

Meta stock has fallen around 10% this year despite strong revenue growth, as investors grow concerned about soaring AI-related expenses. While revenue rose 24% to $59.9 billion, costs jumped 40%, pushing operating margins down from 48% to 41%.

The company is aggressively investing in AI infrastructure, with 2026 capital expenditures projected at $115–$135 billion. This shift from an asset-light model to a capital-intensive one is raising concerns about profitability and long-term returns.

Although Metas growth outlook remains strong, slowing earnings growth and rising costs could lead to valuation pressure. If margins continue to compress, Meta stock may face further downside despite solid demand.