Meta Stock Falls 3.28% This Week Despite Ackman Endorsement and Bullish Analyst Targets

Core Viewpoint - Meta's stock fell 3.28% this week, closing at $639.77, despite a significant endorsement from Bill Ackman and bullish analyst targets, indicating market skepticism about the company's future capital expenditures and AI investments [1]. Group 1: Stock Performance - Meta's stock is down 11.91% over the past year and 13% from its post-earnings close, reflecting ongoing market concerns [1]. - Year-to-date, Meta is down 3.08%, trading below its December 31 close, and further from its 52-week high of $795.06 [1]. - The S&P 500 and Nasdaq 100 also experienced declines of 1.29% and 1.27% respectively during the same period [1]. Group 2: Bill Ackman's Endorsement - Bill Ackman disclosed a significant stake in Meta on February 11, calling it "one of the world's greatest businesses" with strong long-term potential due to AI integration [1]. - Ackman sold stakes in Chipotle, Nike, and Hilton to invest in Meta, Amazon, and Alphabet, indicating a strategic shift towards tech investments [1]. - Retail trader sentiment spiked to 80 on February 11, the highest reading of the week, following Ackman's announcement [1]. Group 3: Capital Expenditure Guidance - Meta guided for capital expenditures of $115 billion to $135 billion for 2026, a substantial increase from $21.4 billion in Q4 2025, which was already a 48% year-over-year increase [1]. - Operating margin declined to 41% from 48% as total costs rose 40% year-over-year, raising questions about the justification of such high expenditures [1]. - Corning announced a $6 billion multiyear fiber optic supply deal with Meta, and Vistra secured a 20-year power purchase agreement for zero-carbon nuclear energy to support Meta's AI data centers [1]. Group 4: Analyst Sentiment - Wall Street analysts maintain an average target price of $860.08 for Meta, suggesting a 34% upside from current levels, with 11 Strong Buy ratings, 51 Buy ratings, and no Sell recommendations [1]. - Despite the stock's decline, analysts have increased their earnings estimates for 2027 from $33.33 to $34.33 in adjusted EPS, indicating confidence in revenue acceleration outpacing margin erosion [1]. - The disconnect between analyst optimism and market performance suggests uncertainty about the timing of returns on Meta's significant capital investments [1].