--- title: "Meta Platforms' increased investment in AI has dragged down its stock price, and strong Q1 performance cannot hide the uncertainty of returns, leading Morgan Stanley to downgrade its rating to \"Hold.\"" type: "News" locale: "en" url: "https://longbridge.com/en/news/284808229.md" description: "Meta Platforms plans to invest an additional $10 billion to expand its AI budget. Despite strong performance in Q1, the stock price temporarily fell over 10% due to investor concerns. Analysts point out that the return path on Meta's AI investments is complex and uncertain, and JP Morgan has downgraded its rating to \"Hold,\" expecting the stock price to remain under pressure. CEO Mark Zuckerberg stated that the company is focused on investment efficiency but has not yet formed a clear product expansion roadmap" datetime: "2026-04-30T16:23:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284808229.md) - [en](https://longbridge.com/en/news/284808229.md) - [zh-HK](https://longbridge.com/zh-HK/news/284808229.md) --- # Meta Platforms' increased investment in AI has dragged down its stock price, and strong Q1 performance cannot hide the uncertainty of returns, leading Morgan Stanley to downgrade its rating to "Hold." According to Zhitong Finance APP, Meta Platforms (META.US) is significantly increasing its investment in the field of artificial intelligence, striving to catch up with Amazon (AMZN.US) and Alphabet (GOOG.US, GOOGL.US) in the rapidly expanding and profitable AI market to capture a larger share. However, the news that the company plans to invest an additional $10 billion to expand its AI budget has raised concerns among investors. Despite strong performance in the first quarter, the stock price fell more than 10% during intraday trading on Thursday. Market participants pointed out that Meta's increased capital expenditure is mainly used to cope with rising costs of computing power, chip components, and data centers. However, compared to cloud service providers, the return path for its AI investments is more complex and uncertain. Bank of America Securities analyst Justin Post stated that the scale of this AI investment cycle exceeds expectations, but the return outlook is not as clear compared to cloud vendors. Wells Fargo analyst Ken Gawrelski noted that Meta's advertising business maintained strong growth in the first half of the year, giving the company some time to validate the returns on its new computing power investments. However, as Google and Amazon provide more direct paths to monetize AI, market patience is gradually being consumed. Due to the pressure of increased capital expenditures on free cash flow, JP Morgan analyst Doug Anmuth downgraded Meta's rating from "Overweight" to "Hold." He stated that the stock price may remain under pressure for some time, and investors hope to see a clearer path regarding how AI agent products and the Muse model can drive new revenue outside of the advertising business. Anmuth added that achieving sustainable returns from AI investments will still take time, as the company needs to go through the complete cycle of product development, iteration, scaling, and commercialization. During the earnings call, Meta CEO Mark Zuckerberg stated that the company is highly focused on improving investment efficiency but also acknowledged that it has not yet formed a clear roadmap for monthly expansion of each product. He mentioned that the company has a general judgment on future development directions and believes that the current quality of products and models is moving towards the goal of "becoming a global leading AI laboratory." Brad Erickson, an analyst at Royal Bank of Canada Capital Markets, pointed out that as AI development accelerates and internal application scenarios expand, computing power is becoming increasingly critical, and Meta has previously underestimated the demand for computing power. He believes that once the company passes the current high investment phase, future profits are expected to achieve a compound growth of 15% to 20%. Despite short-term stock price pressure due to increased AI spending, Wall Street remains optimistic overall. 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