Meta Platforms ( (META) ) has been popular among investors this week. Here is a recap of the key news on this stock.
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Meta Platforms has recently experienced a significant stock price drop, falling nearly 20% from its September peak. This decline, however, may present a unique opportunity for investors as the company is not facing fundamental issues but is instead undergoing a strategic transformation. The drop in stock price was largely influenced by a third-quarter earnings report that showed an 83% drop in net earnings per share, primarily due to a one-time $15.9 billion non-cash tax charge. Despite this, Meta’s core advertising business remains robust, with third-quarter revenue surging 26% year over year, driven by advancements in AI technology.
Meta is aggressively investing in AI infrastructure, with plans to significantly increase capital expenditures in the coming years to support its AI initiatives. This includes the development of AI-powered wearables, as evidenced by its recent acquisition of Limitless, a startup specializing in AI-powered wearable technology. While these investments have raised concerns about profit margins, CEO Mark Zuckerberg believes that the potential benefits of leading in AI outweigh the risks. Analysts remain optimistic about Meta’s long-term growth, with a strong buy consensus and an average price target suggesting a 25% upside potential.