Meta Stock: Why This 25% Drop Could Be The Perfect Buying Opportunity

TLDR

• Meta stock has dropped 25% from its all-time high after announcing heavy AI infrastructure spending plans
• Q3 revenue hit $51.2 billion, beating estimates and up 26% year-over-year, driven by AI-enhanced advertising
• Capital expenditure is projected to exceed $100 billion in 2026, up from $39.2 billion in 2024
• The stock now trades at its lowest price-to-earnings ratio in years, around 20 times earnings
• ARK Invest bought 33,837 Meta shares worth $21.4 million, showing institutional confidence

Meta stock has taken a beating. The social media giant is down roughly 25% from its peak. But some investors see this as a buying opportunity rather than a warning sign.

Meta Platforms, Inc., META

The sell-off came after Meta laid out its spending roadmap. The company plans to pour massive amounts of cash into AI infrastructure. For many investors, that number felt too big to ignore.

Strong Quarter Gets Lost in the Noise

Meta’s third quarter results were actually quite strong. Revenue reached $51.2 billion, crushing the high end of guidance at $50.5 billion. That’s a 26% jump from the previous year.

The AI investments are already showing returns. CEO Mark Zuckerberg reported that AI recommendations increased time spent on Facebook by 5%. Threads saw an even bigger bump at 10%.

These improvements directly impact Meta’s advertising business. Better AI means more effective ad targeting. More time on platform means more ad impressions.

The advertising technology is getting smarter. Conversions are improving. Users are staying engaged longer.

The Spending Problem

Here’s where things get tricky. Meta expects to spend between $70 billion and $72 billion on capital expenditures in 2025. Last year that number was $39.2 billion.

The 2026 spending will grow even more. Based on the pattern, expenditures could easily top $100 billion next year. Most of this money is going toward data centers.

That’s a lot of cash flowing out the door. Investors are questioning whether Meta is moving too fast. The worry is that AI might not deliver returns that justify this level of investment.

But Meta has been here before. Back in 2022, the company was burning through cash for metaverse projects. When that vision faded, Meta adjusted quickly. The company cut spending and returned to generating strong cash flow.

History Repeats Itself

The current situation mirrors 2022 in some ways. Investors lost faith in Meta’s spending priorities. The stock crashed. Then Meta proved it could adapt and the stock recovered.

This time feels different though. AI has more practical applications than the metaverse ever did. The technology is already improving Meta’s core business. The advertising results prove that.

ARK Invest seems to agree. Cathie Wood’s firm purchased 33,837 Meta shares worth $21.4 million. ARK has been vocal about dismissing AI bubble concerns. The fund is betting big on tech companies investing in AI infrastructure.

Valuation Hits Multi-Year Lows

The stock now trades at about 20 times earnings. That’s one of the cheapest valuations Meta has seen in years. A one-time tax charge in Q3 made the ratio look worse than it really is.

Without that charge, the valuation becomes even more attractive. Meta hasn’t traded this cheaply in nearly a decade. The only exception was the 2022 crash when investors completely lost confidence.

The company is still generating massive revenue. The advertising business is growing. AI enhancements are working. And now the stock is on sale.

Capital expenditures will peak eventually. When that happens, Meta’s cash flow should surge. The question is how long investors need to wait.

Meta closed at $633.61 on November 26, 2025. The stock is down $2.61 for the day.

The post Meta Stock: Why This 25% Drop Could Be The Perfect Buying Opportunity appeared first on CoinCentral.