Meta shares fall 5.5% as investor dumps stake over AI spending
Hightower Advisors' Stephanie Link sold half her Meta stake, criticizing the company's 'tone-deaf' approach to AI spending and potential fundraising. Meta shares dropped 5.5% on the news, with capex projected to reach $145 billion this year. Link retains a reduced position but prefers Broadcom, IBM, and Snowflake for AI exposure.
*this image is generated using AI for illustrative purposes only.
Meta shares fell 5.5% on Friday after Hightower Advisors’ Chief Investment Strategist Stephanie Link sold half her position, criticizing the company as “tone-deaf” regarding a report that it is considering raising tens of billions to fund artificial intelligence infrastructure. The stock decline reflects investor anxiety over the company’s plan to significantly increase capital expenditure, which Link argues could depress earnings despite revenue growth. Meta did not immediately respond to requests for comment on the reported fundraising efforts.
Link stated that while revenue numbers are rising, operating margins are moving in the wrong direction, a trend she believes will deter investment. Meta executives have been exploring cash-raising options as the company prepares to boost AI-related capex to as much as $145 billion this year, with further increases expected in 2027, according to a Financial Times report. This spending surge compares to an earlier expectation of $125-$135 billion for this year, up from $74 billion last year. Link noted that Meta has spent $82 billion on Reality Labs since 2021, resulting in $80 billion in operating losses.
“The shareholder base at Meta — they don’t want them to continue to spend like drunken sailors,” Link told CNBC’s Closing Bell. She emphasized that investors are unlikely to support companies where earnings are stagnant or declining. Despite the reduction, Link retains a position in Meta, citing belief in its long-term story, but indicated she will not add back shares until earnings estimates move higher.
Link also commented on the broader AI sector, describing the spend cycle as “accelerating” and advising investors to prepare a shopping list. She identified Broadcom, International Business Machines, and Snowflake as her top picks in the space. Analysts remain divided on the spending strategy; Fundstrat’s Tom Lee noted the move was not surprising, pointing to Google’s success in raising capital, while Alphabet recently raised $85 billion in equity following strong demand.
Trading Metrics and Analyst Ratings
Benzinga Pro data shows Meta closed Friday’s session at $593. The stock has declined 13.38% over the past 12 months and 8.83% year-to-date. The company holds a market capitalization of $1.51 trillion, with a 52-week high of $796.25 and a 52-week low of $520.26.
| Metric | Value |
|---|---|
| Previous Close | $593 |
| 1-Year Change | -13.38% |
| YTD Change | -8.83% |
| Market Cap | $1.51 trillion |
| 52-Week High | $796.25 |
| 52-Week Low | $520.26 |
RBC Capital reiterated its Outperform rating on Meta with a price target of $810 on Monday, implying potential upside of 37.34% from current levels. Benzinga’s Edge Stock Rankings indicate the stock is experiencing short-term upward movement alongside long and medium-term consolidation.
Historical Stock Returns for Meta Infotech
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -4.99% | -6.08% | +0.82% | -29.91% | -66.18% | -66.18% |
Will other institutional investors follow Hightower Advisors' lead and reduce their positions if operating margins continue to compress?
How will Meta's proposed capital raising strategy impact its share buyback program and overall shareholder returns?
What specific AI revenue milestones does Meta need to hit to justify the projected $145 billion capital expenditure?
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