Is Meta Stock a Buy Headed Into 2026?

Core Insights - Meta Platforms has experienced significant revenue growth, with Q3 2025 revenue reaching over $51 billion, a 26% increase from the previous year, following a 22% rise in Q2 [5][6] - The company anticipates Q4 2025 revenue between $56 billion and $59 billion, indicating a growth rate of 19% to 22% [7] - Despite strong business momentum, Meta's capital expenditures are projected to rise sharply, with expectations of $70 billion to $72 billion for 2025, and even larger growth in 2026 [8][9] Financial Performance - Meta's advertising performance has been robust, with ad impressions increasing by 14% year over year and average ad prices rising by 10% in Q3 [6] - The company generated $10.6 billion in free cash flow in Q3, while also returning $3.2 billion to shareholders through repurchases and $1.3 billion in dividends [11] Investment Strategy - Meta is heavily investing in AI, which is expected to drive future growth, but this also increases the risk profile of the stock [2][3] - The company has a strong cash position, ending Q3 with approximately $44.5 billion in cash and marketable securities [11] - The effectiveness of Meta's investment strategy will be crucial in sustaining revenue growth rates in the coming year [13] Market Position - Meta's stock has underperformed compared to the S&P 500 in 2025, with a 13% increase in share price versus a 17% rise in the index [1] - The current price-to-earnings ratio stands at 29, indicating that while the stock is not cheap, it may still be a worthwhile investment given the company's growth potential [13]