By Emily Bary
Meta's chief revenue officer is leaving at a time when Wall Street has become more concerned about the return on AI investments
Meta's stock is at risk of wiping out all its year-to-date gains.
As Meta Platforms steps up its efforts to make money off of artificial intelligence, it will have new leadership in charge of revenue-generating activities.
John Hegeman, a Meta (META) veteran who most recently served as chief revenue officer, plans to leave the company and start a new one. &#34;Meta's business is as strong as it has ever been, and the company is very well-positioned for an AI-powered future,&#34; he said in a Tuesday Facebook post announcing the move.
A Meta spokesperson confirmed the change.
Hegeman's post said that Andrew Bocking, who has led Meta's advertising product and strategy team, will become the product group lead for ads and business messaging. Naomi Gleit will lead business AI and other new monetization efforts. Bloomberg News said she was &#34;the longest-tenured Meta employee&#34; besides CEO Mark Zuckerberg.
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Meta has been successful in turning platforms into cash machines. Back in 2012 when the parent company was still called Facebook, it acquired Instagram for about $1 billion. That purchase has paid off big time for Meta, which has also navigated the transition to new content forms, like Reels, that were initially a drag on revenue.
Other initiatives have been slower to manifest. Recently Meta has been trying to monetize WhatsApp through paid offerings for businesses, but more than a decade after acquiring the platform, Meta still isn't seeing huge revenue contributions from it.
And now the focus has turned to artificial intelligence, where Meta is pouring money into its large language models and tools for advertisers. Investors have grown more impatient as they wait to see the returns on all all of Meta's AI spending. Total expenditures could amount to $118 billion this year, up 24% from a year before, though that estimate also includes things besides AI.
While Deutsche Bank analyst Benjamin Black is upbeat about Meta's fast-growing advertising business, &#34;some will argue that Meta has yet to scale any real tangible...new products from this growing investment cycle,&#34; he acknowledged in a recent note.
The spending concerns have weighed on Meta's shares, which are in danger of wiping out their 2025 gains. At the stock's peak close in August, it was up about 35% on the year, according to Dow Jones Market Data. Now Meta's year-to-date gains have narrowed to just about 2%.
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&#34;At the core of our dour near-term thesis is the view that Meta's stepped-up investment cycle will not generate sufficiently strong returns,&#34; MoffettNathanson analyst Michael Nathanson wrote Tuesday, ahead of the CRO news. He noted that Meta's ratio of capital expenditures to revenue could hit 47% in 2026, versus an estimated 29% for Microsoft (MSFT), 26% for Alphabet (GOOG) (GOOGL) and 16% for Amazon (AMZN).
Nathanson wrote that &#34;while Microsoft, Alphabet and Amazon can all point to their cloud platforms as direct, scalable monetization channels for their AI capex, Meta lacks a comparable, coherent pathway for monetizing [generative AI] directly.&#34;
In the absence of a cloud business, Meta has focused on creating a business around Superintelligence, which Zuckerberg says refers to the process of &#34;automating all valuable work&#34; so that people can spend &#34;more time on creativity, culture, relationships and enjoying life.&#34;
Needham's Laura Martin also emphasized how Meta's lack of a cloud business puts it at a relative disadvantage, as rivals can &#34;generate incremental revenues that partially offset their [generative AI] investments.&#34; Conversely, generative AI &#34;is primarily an incremental cost to Meta,&#34; she wrote earlier Tuesday.
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-Emily Bary
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
11-18-25 2109ET

Meta's stock has been under heavy pressure. Now the company is undergoing a shakeup.