Investing.com -- Oppenheimer downgraded Meta Platforms to Perform from Outperform, citing rising uncertainty around the company’s aggressive investments in artificial intelligence.
Analyst Jason Helfstein told investors in a note that Meta’s “significant investment in Superintelligence despite unknown revenue opportunity mirrors 2021/2022 Metaverse spending,” drawing a parallel with a prior phase of high-cost projects that offered limited near-term returns.
Oppenheimer noted that Meta’s implied fourth-quarter operating and capital expenditures were both about 7% ahead of Street estimates, while the company guided for fiscal 2026 capex dollar growth to be ‘notably larger than 2025’ and for expenses to rise ‘significantly faster’ than 2025’s +23%.
The analyst said both forecasts were “ahead of Street” expectations.
While Meta reported strong advertising trends in the third quarter, with ex-FX advertising revenue up 25% year over year, compared with 21% in the prior quarter and 4% above consensus, Oppenheimer questioned “the rationale for guidance of 600bps deceleration in 4Q.”
Helfstein added that “investors will struggle to rationalize the PE until there is visibility into 2027,” warning that Meta’s “aggressive revenue growth is offset by high spending.”
Oppenheimer also drew comparisons with Alphabet, saying that “GOOG [has] predictable earnings at a reasonable PE.”
It added that “both companies [are] trading at the same PE (21x 2027E), and Search could outgrow META at some point in 2026.”
Meta shares have plunged more than 10% premarket following its quarterly earnings release after the close on Wednesday.
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Oppenheimer downgrades Meta on AI spending concerns
Published 1 week ago
Oct 30, 2025 at 1:49 PM
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