Accelerated AI Spending Hit Meta Platforms (META)

Group 1 - Wedgewood Partners anticipates stronger market volatility in the coming years and has moderated its enthusiasm for investments [1] - The Wedgewood Composite returned -1.8% (net) in Q4 2025, underperforming compared to the S&P 500's 2.7%, Russell 1000 Growth Index's 1.1%, and Russell 1000 Value Index's 3.8% [1] - Year-to-date, the Composite gained 4.3%, significantly lower than the indexes' returns of 17.9%, 18.6%, and 15.9% respectively [1] - Poor stock selection, valuation corrections of past performers, and underweighting in AI stocks contributed to the underperformance [1] - In 2026, crowded AI investments and stretched valuations are expected to pressure prudent investment decisions [1] Group 2 - Meta Platforms, Inc. was highlighted as a leading detractor to Wedgewood's performance in Q4 2025 [2] - On January 16, 2026, Meta's stock closed at $620.25 per share, with a one-month return of -6.24% and a 52-week gain of 1.22% [2] - Meta reported +26% revenue growth, but earnings per share grew less at +20% due to increased spending on AI initiatives [3] - Daily active users on Meta's platforms rose +8% year-over-year, with users spending +5% more time on applications [3] - Meta's platforms have over 3.5 billion daily users, generating significant data for global advertisers [3]