Needham downgrades Meta from sell to neutral: Massive capital expenditures raise concerns

Needham upgraded Meta Platforms' rating from "Market Perform" to "Hold," with analyst Laura Martin noting that slowing employee productivity growth and rising per capita costs are limiting the upside potential for the stock price. Although it is expected that Meta will exceed revenue and profit margin expectations, with revenue projected to grow by 14% and earnings per share by 6% in 2025, it still faces challenges such as a surge in capital expenditures, structural cost disadvantages, and regulatory risks. Capital expenditures are expected to reach $68 billion in fiscal year 2025, an increase of 84% year-on-year