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Meta Platforms has invested heavily in artificial intelligence and plans to increase spending even further in 2026.
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These AI investments have drawn comparisons to Meta’s expensive metaverse venture.
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The key difference is that Meta’s AI spend is already driving growth in its advertising business.
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10 actions that we like more than MetaPlatforms ›
Metaplatforms (NASDAQ: META) plummeted after its third-quarter earnings report, largely due to the company’s significant spending on artificial intelligence (AI), and plans to spend even more in 2026. From October 29 to November 20, Meta’s stock price fell 22%, from $752 to less than $600.
Investors are worried that AI will become the next metaverse, which has cost Meta more than $70 billion since 2021. However, there is a crucial point that many are overlooking.
The metaverse has been a money pit so far and will most likely never pay off in a significant way. AI, on the other hand, is already bringing legitimate value to Meta. The social media company has integrated AI tools into its advertising products, allowing companies to optimize ad layouts, set up automated rules that pause or boost ads based on performance, and receive AI-based advertising insights.
These tools have contributed to better ad engagement, higher prices, and more money for Meta. Ad impressions increased 14% year over year in Q3 2025, and average price per ad increased 10% year over year. Revenue for the first three quarters of the year was $42.3 billion (up 16%), $47.5 billion (up 22%), and $51.2 billion (up 26%).
With $44.8 billion in free cash flow (FCF), Meta can afford to make substantial investments in AI. While the metaverse flashbacks are understandable, spending on AI could be a winning move for Meta. I still consider the company a buy and have been picking up shares during the decline.
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