Meta Stocks Fall 3.7% as Analyst's $225 Billion Spending Forecast Raises Stakes

Democratic senators accused Meta of misusing a federal R&D tax credit, saving $6.6B from 2023-2025, primarily for AI data centers. They claim the credits are intended for research, not capital expenditures. Meta acknowledges legal risks in its filings. Senators demand details on the company's tax strategy.

Meta Platforms (META) shares fell 3.7% after Guggenheim analyst Michael Morris raised his 2027 capital spending estimate to $225 billion. The company reported 28% revenue growth to $60.80 billion in Q2, but operating income declined 8% due to rising expenses. Meta projected $130 billion–$145 billion in 2026 capital expenditures for AI and core business.

Guggenheim Securities raised its price target for Meta Platforms (META) to $850, citing progress in AI and the potential of its Muse AI agent. Meta scores 56 on the AI Index, close to Anthropic's 58. Guggenheim expects Muse to monetize through business payments, similar to Meta's advertising model, and anticipates increased capital expenditure. META stock was down 3.17% at $738.32 at the time of publication.

Meta Platforms CEO Mark Zuckerberg announced plans to invest $100 billion to $200 billion in AI infrastructure, including high-capacity computing facilities. He defended the strategy, citing Meta's profitable core business and industry demand for computing power. The company aims to monetize AI through consumer subscriptions and business tools. META stock was down 0.68% in overnight trading, up 5.34% over the last year, and up 14.65% over the last month, closing at $742.96 on Monday.

Meta's planned data center in Richland Parish will require 4,500 MW of electricity, nearly four times New Orleans' peak demand. Entergy Louisiana CEO Phillip May stated the company will cover infrastructure costs and adjust payments if costs change, addressing critics' concerns about financial risk to other ratepayers.

Meta Platforms introduced two new AI models, Muse Wonder and Muse Wonder Full, scoring 56 on an intelligence benchmark. Bank of America reiterated its 'buy' rating and $810 price target, citing potential revenue growth from enterprise contracts and cloud partnerships. Meta shares rose 6% post-launch.