Meta Platforms’ 20% layoff signals more AI investment ahead, says Oppenheimer

Oppenheimer analyst Jason Helfstein is reiterating a Perform rating on Meta Platforms (META) as it believes delayed LLM launch and rumored 20% headcount reduction signals a company on the defensive. Oppenheimer sees two scenarios: even higher AI opex/capex given fierce competition; or frontier LLM will be even more delayed, and management will point to margin upside in hopes of placating investors. As Meta provided FY26 opex about eight weeks ago, the decision to lower headcount now seems surprising, Oppenheimer argues. The longer Meta takes to launch Avocado, the harder it will be to catch competitors, as their own models keep improving. Meanwhile, a 20% RIF suggests about $1.60 EPS upside in 2027 or 5% above the firm’s current estimate. Given the uncertain outlook, Oppenheimer expects shares will remain range bound unless AI begins driving significant engagement tailwinds.