Meta’s (META) AI Push Mirrors Metaverse Risks, Says Oppenheimer

Core Viewpoint - Oppenheimer downgraded Meta Platforms, Inc. to "Perform" from "Outperform" due to uncertainties surrounding the company's AI investments following Q3 earnings [1][2] Group 1: Investment Analysis - The firm expressed concerns that investors will find it challenging to justify Meta's price-to-earnings multiple until there is clarity regarding 2027 earnings [2] - Meta's aggressive revenue growth is being countered by high spending, leading to a risk/reward scenario that is now more balanced [1][2] Group 2: Comparisons with Competitors - Oppenheimer compared Meta to Alphabet, noting that both companies are trading at the same price-to-earnings ratio of 21x for 2027 estimates, but Alphabet has more predictable earnings [3] - The firm suggested that Alphabet's search business could potentially outgrow Meta's offerings by 2026 [3] Group 3: Future Outlook - Meta's significant investments in artificial intelligence and the metaverse are highlighted, but the firm believes that other AI stocks may present better upside potential with less downside risk [4]