Meta (META) to Spend $135 Billion on AI

Meta Platforms (NASDAQ:META) shares fell 4.9% to 582.9 dollars on July 2, 2026, as investors weighed the company's plan to pour up to 145 billion dollars into artificial intelligence infrastructure next year.

Capex Nearly Doubles as AI Bet Grows

Meta expects to spend between 125 billion and 145 billion dollars on capital expenditures in 2026, mostly aimed at data centers and computing power for AI. The high end of that range is roughly double the 72 billion dollars the company spent last year. With a market capitalization of 1.48 trillion dollars, Meta is betting a meaningful chunk of its balance sheet on the idea that AI will reshape its core advertising business rather than just support new products.

Advertising Still Drives Nearly Everything

Founder and CEO Mark Zuckerberg has laid out five AI priorities, covering content recommendations, business messaging, the Meta AI assistant, and AI hardware. But advertising sits at the center of the strategy. On the first quarter 2025 earnings call, Zuckerberg described a future where any business could simply tell Meta its goal, whether that is a sale or a new customer, and how much it is willing to pay per result, then let Meta's systems handle the rest. He argued that if this works, AI driven productivity gains could push advertising into a meaningfully bigger share of global GDP.

The numbers back up how central ads remain. Advertising revenue hit 55 billion dollars in the first quarter ended March 31, accounting for 98% of total revenue. Ad impressions climbed 19% year over year, and the average price per ad rose 12%, combining to push overall revenue up 33% from the same period a year earlier, the fastest pace since the third quarter of 2021.

Meta Valuation, Momentum and Yield

Meta trades at a price to earnings ratio of 24.31, a level that looks reasonable next to other AI focused megacaps given the company's ad revenue growth. The stock's 52 week range spans 540.18 to 691.52 dollars, and Friday's price near 582.9 sits closer to the lower third of that band. The relative strength index reads 50.04, a neutral reading that suggests neither strong buying nor selling pressure has taken hold. The dividend yield stands at a modest 0.36%, reflecting a company still prioritizing reinvestment over shareholder payouts.

The bull case rests on Meta's ad engine. If AI tools genuinely let advertisers automate targeting and pricing, as Zuckerberg described, revenue growth could stay elevated even as spending rises. The bear case centers on that same spending: with capex potentially reaching 145 billion dollars, investors want proof the outlays translate into durable ad revenue gains rather than just higher depreciation and lower free cash flow.

Why Wall Street Wants Proof Before Patience

The scrutiny is already visible in the share price. Meta stock had fallen 15% in 2026 as of June 29, and sits 29% below its record high. That decline suggests the market is no longer giving Meta credit simply for spending big on AI. Instead, each earnings report is becoming a test of whether the capital intensive strategy is actually widening the advertising business Zuckerberg has staked the company's future on.