Meta Platforms: Bulls and bears weigh its stock potential amid AI-driven growth

Meta Platforms’ recent operational performance and stock performance have been moving in opposite directions, suggesting investors are divided on the company’s outlook. The debate centers on whether Meta’s core advertising business can sustain an “AI flywheel,” or whether spending priorities—particularly in past side projects—remain a material risk.

The bull case for Meta Platforms

Meta Platforms is a major global digital advertising platform, powered by Facebook and Instagram. The company’s apps attract billions of users, with nearly 3.6 billion daily active users as of year-end 2025.

Over time, Meta has shifted its platforms from primarily helping people stay connected to positioning them as entertainment destinations. The company’s key advantage is monetizing its large user base, making its platforms a destination for small and medium-sized advertisers seeking customer reach.

Meta also leverages AI to drive growth in its core advertising business. The article describes Meta’s platform as an “AI flywheel,” where improved ad performance encourages advertisers to reinvest more into ads on Meta’s sites. It also points to Meta’s move from social-graph-based recommendations to AI-based discovery, which is intended to deliver more of the content users want.

Meta’s Generative AI Recommendation Model (GEM) and Lattice architecture are described as providing a more comprehensive view of user engagement across its platforms. The article links this to higher ad loads, improving conversions, and stronger ad impression growth, which in turn supports higher ad prices—reinforcing the flywheel dynamic.

In addition, the article notes that Meta is beginning to serve ads on WhatsApp, which it says has over 3 billion users outside the U.S. It also cites Threads as an emerging platform that is “slow-cooking” its user base and adding features, potentially contributing to future growth.

The bear case for Meta Platforms

While the company is described as highly effective at monetizing its social media apps, the article highlights a history of heavy spending on side initiatives. It points to CEO Mark Zuckerberg’s metaverse push as a major example, calling it a failure.

The Reality Labs segment, associated with the metaverse effort, has reportedly lost more than $80 billion since 2020, including $19 billion last year, with the article stating there has been little to show for the losses. It also notes that Meta is shutting down Horizon’s World on its VR devices later this year.

The article further argues that Meta is now pivoting spending toward AI and AI infrastructure. It says Meta released its first foundational large language model (LLM) earlier this month after investing billions of dollars in Scale AI and bringing in Scale AI founder Alexandr Wang to lead the effort. The new model, Muse Spark, is described as strong in some areas but weaker in others, raising the question of whether Meta can ultimately profit from it.

The verdict on Meta

The article concludes that Zuckerberg’s spending on vanity projects remains a concern, and that his new “personal superintelligence” ambitions could lead to similar priorities. Still, it argues Meta’s core business is well positioned as an AI flywheel.

It also states the stock is attractive on valuation, citing a 21.5 times forward P/E, and characterizes Meta as a “buy.”