Meta's AI conundrum: Here's what to know

Financial Performance & Investment Concerns - Meta's capital expenditures are growing faster than its revenue, raising concerns for investors [1] - Projected capital expenditures for the year could reach as high as $72 billion, an 84% increase from the previous year [2] - Meta's capital expenditures as a percentage of revenue could reach 37% this year [2] - Analysts are questioning when investors will see a return on Meta's significant spending [2] AI & Competitive Landscape - Meta's flagship AI model, Llama 4, has been described as underwhelming [3] - Goldman Sachs highlights the intense competition surrounding foundational models and less visibility into Meta's potential returns compared to rivals [3] - There has been a measurable impact in AI improving ad results [2] Metaverse & VR/AR Investments - Meta is experiencing growing expenses in VR headsets, augmented reality hardware, AI-enabled Ray-Ban glasses, and its metaverse division, with no clear return on investment [4] - An analyst warns that Meta's "strategy diffusion" will lower its overall success [4] Stock Performance - Meta's stock is underperforming other tech giants, down approximately 16% and 12% since its last earnings report [1]