Erste Group Downgrades Meta to Hold Citing Rising AI Investment and Lower Upside

Group 1 - Erste Group downgraded Meta Platforms Inc. from Buy to Hold due to expected sharp increase in spending related to AI expansion and reduced potential for share price appreciation at current valuation levels [1] - Significant acceleration in capital expenditures is anticipated in 2026 compared to 2025, primarily for infrastructure development and AI-related initiatives, including computing and cloud capacity investments [1] - The asset turnover ratio is expected to decline further as a result of heavier capital investments [2] Group 2 - Meta's share buyback activity has already dropped substantially and is likely to remain constrained due to the scale of planned spending [2] - There is limited upside potential for Meta in the near term despite its strong market position, attributed to anticipated rise in capital intensity and reduced buyback flexibility [3]