Meta Platforms Shares Rise on $10B AI Infrastructure Expansion and Strong Analyst Outlook

Shares of Meta Platforms, Inc. (NASDAQ:META) Rise on AI Infrastructure Expansion and Analyst Optimism

Shares of Meta Platforms are increasing as the company advances its AI infrastructure and analysts highlight growth potential despite recent legal and market challenges.

Meta Platforms is attracting investor interest due to plans to expand its El Paso data center with a $10 billion investment supporting AI capabilities, alongside steady earnings growth expectations and favorable analyst ratings. The stock is also rebounding from legal setbacks and broader market risk appetite. Analyst forecasts project significant revenue increases by 2026, with Morgan Stanley labeling the stock a top buy owing to undervaluation relative to long-term earnings potential.

Key Points

• Meta Platforms is expanding its El Paso data center to 1 gigawatt, with investments exceeding $10 billion tied to AI infrastructure development.
• The AI expansion project supports over 300 permanent jobs and targets water-positivity goals by 2030.
• Analysts expect Meta’s 2026 revenue to reach $55.41 billion, up from $42.31 billion in the prior year, with EPS forecasted at $6.63.
• Morgan Stanley rates Meta stock as Overweight with a lowered price target of $775, citing a 50% upside and underappreciated AI-driven advertising growth.
• Meta stock trades below major moving averages but rallied 2.68% to $587.54 amid a broader market recovery favoring tech growth stocks.

Meta’s AI Infrastructure Expansion Drives Stock Performance

Meta Platforms’ rebound is closely linked to investor optimism regarding its accelerated AI buildout. The company plans a major expansion of its El Paso data center, increasing capacity to 1 gigawatt and pushing total investment beyond $10 billion. This strategic project supports long-term AI capacity, creating over 300 permanent jobs and employing more than 4,000 construction workers at peak, while also committing to restoring 200% of the water used locally by 2030.

This significant infrastructure investment aligns with Meta’s broader AI strategy, aimed at enhancing machine learning algorithms that power digital advertising and user engagement. The company’s optimism in AI is echoed by analysts forecasting faster-than-consensus sales growth—28% in 2026 and 21% in 2027. However, traders remain cautious as Meta’s stock remains below several key technical moving averages, signaling potential resistance levels.

Legal Challenges and Market Context

Meta Platforms shares have been impacted by recent legal setbacks, including a California jury ruling that held the company largely responsible for a social media addiction lawsuit, awarding compensatory and punitive damages totaling $6 million. Despite this, the stock is recovering partly due to a broad market risk-on environment, with strong performances from indices like the Russell 2000 and Consumer Discretionary sector, which typically supports advertising-driven platforms.

Analyst Outlook and Valuation

The consensus among analysts is positive for Meta Platforms, forecasting an earnings per share (EPS) of $6.63 and revenue near $55.41 billion for the fiscal year 2026, marking substantial year-over-year growth. Morgan Stanley maintains an Overweight rating, recently lowering its price target to $775 from $825 but emphasizing a strong buying opportunity given Meta’s current valuation at approximately 15 times its projected 2027 EPS of $36. This valuation is one standard deviation below the stock’s long-term average, suggesting undervaluation.

Tigress Financial and Wells Fargo also hold optimistic outlooks, with price targets of $945 and $856 respectively. Morgan Stanley analyst Brian Nowak highlights underappreciated growth potential in Meta’s AI-driven advertising tools and accelerating user engagement, particularly in video content, as drivers of future revenue growth.

Stock Market Performance and Technical Indicators

At the time of the latest report, Meta’s stock price rose 2.68% to $587.54, recovering slightly from recent lows. Despite this uptick, the stock remains 20% down year-to-date and 33% below its August 2025 peak of $796.25. Technical measures show Meta trading below its 21-day, 50-day, and 200-day moving averages, with a Relative Strength Index score declining to 20 out of 99, indicating bearish momentum, down from 76 six months prior. The stock’s IBD Composite Rating sits at 54, reflecting moderate growth prospects relative to top-performing growth stocks.

Long-Term Growth Prospects and Risks

Meta Platforms remains a leading social media company with a user base of 3.58 billion daily active users as of the end of 2025, supported by its portfolio of platforms including Facebook, WhatsApp, Instagram, and Messenger. Its dominant position in digital advertising—with high margins and improving engagement driven by AI innovations—provides a robust foundation for sustained growth.

The firm's substantial cash reserves, reported at $81.6 billion at the end of 2025, strengthen its financial resilience, enabling continued investments in AI and new ventures like business messaging on WhatsApp and AI-powered smart glasses. While cyclicality in ad spending and regulatory/legal pressures pose risks, Meta has historically managed such challenges through cost controls and strategic adaptation.

Additional Developments

Meta Platform’s launch of Ray-Ban Display glasses in Europe faces delays due to regulatory and supply issues. The company is also reportedly engaged in partnership talks with Indian billionaire Gautam Adani concerning data centers, alongside Google and Walmart’s Flipkart. Separately, Meta CEO Mark Zuckerberg was appointed to President Donald Trump’s Council of Advisors on Science and Technology, reinforcing the company’s influence in the tech sector.

Meta Platforms is positioned for long-term growth driven by scale, innovation in AI, and expanding infrastructure, despite recent legal and market volatility. Analyst consensus and strong investment in AI suggest significant revenue expansion potential, making Meta a notable consideration for growth-oriented investors.