Meta Platforms' AI-Driven Growth Potential in 2026: Assessing the Justification for Price Targets and Long-Term Investment

Meta Platforms (META) has emerged as a pivotal player in the artificial intelligence (AI) landscape, with its 2025 capital expenditures (capex) and monetization strategies underscoring a bold bet on AI-driven growth. As the company ramps up investments in data centers, cloud infrastructure, and AI research, investors are scrutinizing whether these expenditures align with its revenue trajectory and the bullish price targets set by analysts. This analysis evaluates Meta's AI monetization momentum, capex trajectory, and market sentiment to determine if the stock's current valuation and projected growth justify a long-term investment case.

Capital Expenditures and AI Infrastructure: A Strategic Bet

Meta's 2025 capex projections have surged to $64–72 billion, up from an initial $60–65 billion range, reflecting an aggressive commitment to AI infrastructure. This increase is driven by rising costs for data center hardware and the need to scale computing power for generative AI development according to company statements. CEO Mark Zuckerberg has emphasized that maintaining "industry-leading computing power" is critical to staying ahead in AI innovation as reported by analysts.

The company's broader $600 billion investment plan in the U.S. through 2028 further cements its long-term vision according to Meta's announcement. These funds will expand AI data centers, enhance operational capacity, and support sustainability goals such as achieving water-positive status by 2030 as detailed in financial reports. While the scale of capex raises concerns about short-term profitability, Meta's CFO Susan Li has signaled that 2026 expenditures could exceed $100 billion, indicating a willingness to prioritize AI infrastructure over immediate cost constraints.

AI Monetization: Advertising Dominance and Emerging Revenue Streams

Meta's AI monetization strategy is anchored in its advertising business, which accounted for 98.6% of Q3 2025 revenue ($50.08 billion). The company's AI-powered Advantage+ suite, which optimizes ad targeting and performance, now operates at a $60 billion annual revenue run rate-a threefold increase from earlier in 2025 according to financial reports. This growth is fueled by a 26% year-over-year rise in ad revenue, driven by higher ad impressions (up 14% YoY) and increased average price per ad (up 10% YoY).

Beyond advertising, Meta is diversifying its AI revenue streams. Reality Labs, the division behind Quest headsets and AI glasses, generated $470 million in Q3 2025, a 74% YoY increase. The company's "Family of Apps" also contributed $690 million in non-advertising revenue, primarily from WhatsApp paid messaging and Meta Verified subscriptions as reported in Q3 results. While these figures remain modest compared to ad revenue, they highlight Meta's efforts to monetize AI through hardware and subscription services.

Analyst Sentiment and Price Targets: A Bullish Outlook

Analyst sentiment for META remains overwhelmingly positive, with 90% of analysts maintaining a "Buy" rating and a median price target of $845.00 as of December 2025. Major firms like Rosenblatt Securities and Baird have set price targets as high as $1,117.00 and $815.00, respectively, citing Meta's AI advancements and upcoming large language model (LLM) launch in early 2026 as key catalysts. BofA Securities has also maintained a "Buy" rating with a $810.00 target, emphasizing the potential for AI-driven automation to further boost ad revenue.

Strategic moves such as the acquisition of AI-wearables startup Limitless and the hiring of Apple design executive Alan Dye underscore Meta's ambition to integrate AI into immersive hardware as noted in market analysis. These initiatives align with the company's vision of delivering "personal superintelligence" through AI-powered platforms, a narrative that has resonated with investors.

Risk Considerations: Capex Pressure and Competitive Dynamics

While Meta's AI monetization momentum is robust, its aggressive capex strategy could strain short-term financial flexibility. The company's 2025 capex of $64–72 billion represents a significant increase from previous years, and 2026 projections suggest further pressure on cash flow. Critics may question whether the returns from AI-driven ad tools and hardware sales will offset these costs, particularly as competition intensifies. However, Meta's ability to scale Advantage+ to a $60 billion run rate demonstrates its capacity to monetize AI at scale, mitigating some concerns.

Conclusion: A Compelling Case for Long-Term Investment

Meta's AI-driven growth strategy is underpinned by a combination of aggressive infrastructure investments, a dominant advertising business, and emerging revenue streams from hardware and subscriptions. The company's capex trajectory, while daunting, reflects a long-term commitment to maintaining AI leadership in a rapidly evolving landscape. Analysts' high price targets and bullish sentiment further reinforce the potential for outsized returns, particularly as Meta's LLM and AI glasses rollouts gain traction in 2026.

For investors, the key question is whether Meta can sustain its AI monetization momentum while managing capex pressures. Given the company's track record of scaling AI-driven ad tools and its strategic investments in hardware and sustainability, the current valuation appears justified. While risks remain, the alignment of capex, monetization, and analyst confidence makes a compelling case for META as a long-term investment.