Dan Ives Is Pounding the Table on Meta Platforms Despite a ‘Capex Super Cycle.’ Should You Buy META Stock Here?

Core Viewpoint - Meta Platforms, despite a strong revenue growth, faces investor concerns due to its significant capital expenditure plans and stock price volatility, leading to a mixed sentiment in the market [3][5][16]. Company Overview - Meta Platforms, originally Facebook, has evolved into a global digital ecosystem with platforms like Instagram, WhatsApp, and Messenger, and is now focusing on AI, augmented reality, and the metaverse [2]. - The company has seen a remarkable stock performance over the past decade, with a valuation of approximately $1.5 trillion, but recent price actions indicate a period of recalibration [1]. Financial Performance - In Q3 2025, Meta reported a 26% year-over-year revenue increase to $51.2 billion, driven by strong advertising performance and AI enhancements [9]. - Ad impressions grew by 14%, and average ad prices rose by 10% year-over-year, reflecting robust advertiser demand [11]. - Despite strong operational results, the stock fell over 11% post-earnings due to concerns about future capital expenditures and ongoing losses in Reality Labs [16]. Capital Expenditure Plans - Meta is planning a significant capital expenditure surge, projecting $70 billion to $72 billion for 2025, with expectations for even larger spending in 2026 [4][13]. - This spending is aimed at enhancing data centers and AI infrastructure, which is seen as essential for the company's future growth [15]. Market Sentiment and Analyst Opinions - Analysts express mixed sentiments; while some see the heavy spending as a strategic move for long-term growth, others are concerned about the immediate financial implications [18][20]. - Wedbush analyst Dan Ives maintains a positive outlook, projecting a price target of $920, citing a potential capex super cycle and strong underlying demand [18][22]. - Rosenblatt analyst Barton Crockett raised Meta's target to $1,117, emphasizing the justification of higher capex due to expected AI returns [21]. Stock Performance and Valuation - META stock has experienced a decline of approximately 22% post-earnings and is currently 26% below its year-to-date peak [6]. - The stock trades at 20.7 times forward earnings, which some analysts view as a premium that reflects the company's scale and innovation [8]. - The average analyst price target for META is $843.13, indicating a potential upside of 43% from current levels [23].