Close
Meta Platforms is making significant investments in AI infrastructure, with capital expenditures (CAPEX) projected to reach $40 billion in 2024. Concerns arise as these investments could escalate to $55-60 billion in 2025, potentially reducing free cash flow to $30 billion. The company must demonstrate sustainable returns on these heavy investments to maintain investor confidence.
The aggressive spending on AI, including a $10 billion data center in Louisiana and a $1 billion expansion in Illinois, raises alarms about profitability. Despite a strong stock performance in 2024, the anticipated drop in free cash flow could lead to a valuation correction of up to 25%. Given these factors, a cautious approach is recommended, with a 'Sell' rating assigned.
• Meta's CAPEX for AI could reach $55-60 billion in 2025.
• Free cash flow may drop to $30 billion due to heavy investments.
CAPEX refers to capital expenditures, which are funds used by Meta for AI infrastructure investments.
Free cash flow is the cash generated by Meta after accounting for capital expenditures, crucial for assessing profitability.
AI infrastructure includes the physical and virtual resources that support AI operations, such as data centers.
Meta Platforms is heavily investing in AI infrastructure to enhance its services and maintain competitive advantage.
Seeking Alpha 11month
Isomorphic Labs, the AI drug discovery platform that was spun out of Google's DeepMind in 2021, has raised external capital for the first time. The $600
How to level up your teaching with AI. Discover how to use clones and GPTs in your classroom—personalized AI teaching is the future.
Trump's Third Term? AI already knows how this can be done. A study shows how OpenAI, Grok, DeepSeek & Google outline ways to dismantle U.S. democracy.
Sam Altman today revealed that OpenAI will release an open weight artificial intelligence model in the coming months. "We are excited to release a powerful new open-weight language model with reasoning in the coming months," Altman wrote on X.
Log in
Sign Up
AI Tools - Popular
AI Tools - Categories
GPTs - Categories
AI for Jobs
Key AI Highlights in this Article
Key AI Terms Mentioned in this Article
Companies Mentioned in this Article
