Meta Platforms (META) is now trading below $600, roughly 25% below its all-time high, and investors are growing uneasy. The company’s user base has arguably matured, raising questions about whether its aggressive, long-term AI spending can deliver the kind of growth that once justified its premium valuation.
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As a result, the familiar “20% reversion from the highs” narrative has resurfaced, with bearish voices growing louder and more confident as the stock retreats. Even a brief glance at the price chart reveals that META experienced a similar selloff earlier this year — one that was amplified by geopolitical volatility related to macroeconomics, Donald Trump, and Chinese tariffs.
Internally, Meta’s substantial AI spending is suppressing near-term profitability, and its forward cost guidance has further tempered market sentiment. Even so, I believe Meta warrants a long-term perspective—and there are compelling reasons why the bull case remains very much intact.
The Market is Judging Meta on Its Profit Trajectory
In its latest quarter, Meta raised 2025 capex guidance from $66–$72 billion to $70–$72 billion, while also raising expenses from $114–$118 billion to $116–$118 billion. This double hit shows a definitive doubling down on the AI thesis. There was strong language about “aggressively frontloading” investments in AI, and management is clearly confident that these capital allocation decisions will pay off.
However, analysts want to know how the AI investments will deliver the ROI the company has worked so hard to build. Susan Li, the company’s CFO, stated that strong revenue growth will probably emerge from the company’s investments in ads and organic engagement. With her clearly outlining that total expenses are rising, the real question is exactly when profit generation (at the scale currently implied by present capex) will come.
The kind of profit growth being forecast could be delivered when the company has a moat that requires less infrastructure expansion than at present, which is a tangible reality, given that other Big Tech hyperscalers operate in different niches and don’t compete in direct social media at Meta’s scale.
Another critical question is whether management will begin optimizing the current infrastructure and deliver profit-based value to shareholders (for example, by reducing the workforce amid greater autonomy). In the future, Meta could order fewer semiconductor chips or scale back its operating expenses even as it further ramps up its autonomy capabilities. In other words, doing more with less.
Zuckerberg Remains Focused on the Long Term
At the moment, the market is pressuring Meta to deliver quick ROI, but the company may prioritize long-term strategic gains over appeasing short-term sentiment. By continuing to invest in top-line growth and expanding its competitive moat, Meta can allow more meaningful profit acceleration to unfold gradually over time. This approach could lead to near-term stock consolidation—though a more profound decline seems unlikely, given management’s clear commitment to shareholder value—but it would position the company for stronger, more durable dominance in the long run.
We also have to view Meta’s current business strategy through the lens of today’s geopolitical landscape. If Meta were to focus too heavily on short-term shareholder satisfaction and near-term profitability, it risks falling behind as China continues prioritizing what truly matters for long-term tech leadership: infrastructure.
Ceding an infrastructure advantage to Chinese competitors is not an outcome Meta—or any major U.S. tech company—can afford. In such a scenario, platforms like WeChat could strengthen their foothold in international markets, potentially eroding WhatsApp’s global share. This is the real AI arms race: not simply company versus company, but the U.S. versus China.
Given the current market skepticism (as indicated by the recent price decline), META’s forward PEG ratio of 1.47 is now only 5% above the sector median of 1.39, indicating a consensus that future earnings growth will be strong and that the current price is well justified in the current climate. For value investors, an established growth stock like this trading at a near-fair PEG value is an exceptional opportunity—and it’s the primary reason why I think adding META to one’s portfolio at current levels is opportunistic and prudent.
Is Meta a Good Stock to Buy Now?
On Wall Street, Meta has a consensus Strong Buy rating, based on 34 Buys, seven Holds, and one Sell. The average META price target of $840.92 indicates a 42% upside potential over the next 12 months.
This reveals a strong backdrop of resilient analyst sentiment even while the market aggressively sold shares following the recent earnings results. It’s often wise to stay committed to management teams that have proven themselves to be long-term winners, which Meta’s team certainly has over time.
Meta Isn’t Done Yet, and I’m Along for the Ride
Admittedly, it’s difficult to buy shares in a company when the price has just taken a tumble. But in Meta’s case, most of us can agree it’s a remarkable company with an already undeniable moat in social media. Granted, the capital expenditures and rising costs are a lot to bear, but as a long-term allocator, it shouldn’t matter too much. For investors already long META, I see no reason to sell on volatility, and now that META’s value proposition is even clearer, I’m adding to my position at lower levels while remaining very confident in the return trajectory.