Social media giant Meta (META) is building an AI data center so large that its power needs now rival those of an entire U.S. state. More specifically, its upcoming Hyperion facility in Louisiana is expected to use as much electricity as South Dakota once fully operational. To meet that demand, Meta recently said it will fund seven new natural gas power plants, on top of the three that are already planned. Altogether, these 10 plants are expected to generate about 7.5 gigawatts of electricity.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
However, the decision raises questions about Meta’s environmental strategy. Indeed, the company has long promoted its commitment to sustainability by investing in renewable energy and even securing long-term access to nuclear power. However, choosing to rely heavily on natural gas, often described as a “bridge fuel,” appears to move in a different direction. While this approach is sometimes justified as a temporary solution until renewables scale further, critics note that renewable energy and battery costs have fallen significantly in recent years.
In addition, the environmental impact could be significant. Estimates suggest that the new power plants could produce around 12.4 million metric tons of carbon dioxide each year, which is about 50% higher than Meta’s total carbon footprint in 2024. In addition, this figure does not include methane leaks from natural gas production and transport, which can make emissions even worse. Methane is far more potent than carbon dioxide, and current leak rates in the U.S. are relatively high. As a result, Meta may need to rely more heavily on carbon offsets in order to meet its climate goals.
What Is the Price Target for Meta?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 39 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $862.05 per share implies 50.7% upside potential.
