Meta's Struggling Stock: A Rare Opportunity or a Recipe for Disaster?
Meta Platforms (NASDAQ: META) has been on a rollercoaster ride this year, along with its peers in the 'Magnificent Seven' group. While Nvidia, Apple, Microsoft, Amazon, Alphabet, and Tesla have seen their stocks fluctuate, Meta's struggles are more pronounced, down 1.2% for the year through market close on September 10.
The tech giant's spending is a major concern, with expected capital expenditures ranging from $130 billion to $145 billion this year. In the second quarter (Q2), Meta spent $31 billion on AI-related projects alone, which is more than all but 26 public companies have made in profits in their past four quarters combined.
Additionally, Meta recently agreed to an $18 billion settlement with regulators over claims that its apps were addictive and contributed to teen mental health decline. While this amount is significant, it's still a fraction of the $1.4 trillion penalty the company could have faced in a full trial.
Despite these challenges, Meta's family of apps continues to show steady growth in user base and revenue per user. Its average revenue per person jumped 24% year over year to $16.86 in Q2, indicating that the social media giant is still attracting eyeballs and making money from them.