Meta: More Than One-Third Of Revenue To Be Spent On AI In FY2025

Summary

• META's stock is nearly up 50% since April low and could hit new highs soon, as markets expect ad spending to hold up despite potential economic slowdown in 2H 2025.
• AI remains the key growth driver, supported by Llama 4 releases, strategic AI acquisitions, and in-house AI team expansion.
• Advertising growth is still resilient on a constant currency basis, with AI monetization and new channels like WhatsApp and Threads driving revenue growth.
• Capex as a percentage of total revenue is expected to rise to 36% in FY2025, up from 23% in FY2024, showing AI spendings will accelerate in the coming quarters.
• The stock trades at 28x forward P/E, below the Nasdaq index, and the recent rally hasn't significantly stretched its valuation (meaningful progress in AI could justify a higher valuation).

Kira-Yan

The Stock Nearing All-Time High

Meta Platforms (NASDAQ:META)'s stock is once again approaching its all-time high, following a relentless, broad-based market rebound since early April. I believe META, as one of the Magnificent 7 with a long-term AI growth roadmap, can

Analyst’s Disclosure:I/we have a beneficial long position in the shares of META:CA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.