Does Meta's $1.5B AI Data Center Boost Its Long-Term Growth Story for META?

• Meta Platforms recently broke ground on a major new AI-focused data center in El Paso, Texas, representing an investment of over US$1.5 billion and the company's 29th data center project.
• This facility is designed with flexibility for both current and future AI workloads, underlining Meta's intention to lead in artificial intelligence infrastructure while supporting the growing computational needs of its products and services.
• We'll explore how Meta's significant commitment to AI infrastructure in Texas could shift expectations for its long-term revenue growth and technology leadership.

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Meta Platforms Investment Narrative Recap

To own Meta Platforms shares, an investor needs confidence in the company’s ability to convert large-scale AI investments into profitable business improvements, most notably through advancements in advertising and sustained platform engagement. The newly announced El Paso AI data center reinforces Meta's technology ambitions, yet it does not meaningfully change the most immediate catalyst, which remains driving ad revenue through better usage of AI across its properties. The main risk continues to be expense growth potentially outpacing revenue gains due to aggressive infrastructure bets, though this news does not materially alter that outlook.

Among recent developments, DoubleVerify’s expansion of brand suitability measurement to Meta’s Threads feed stands out. This move gives advertisers more confidence with improved transparency and independent verification of ad placements, aligning directly with Meta’s push for stronger ad performance, a core catalyst for near-term revenue drivers.

However, investors should also be aware that while optimism surrounds AI-driven ad growth, there are unresolved questions about...

Read the full narrative on Meta Platforms (it's free!)

Meta Platforms' forecast puts revenue at $275.9 billion and earnings at $92.1 billion by 2028. This outlook is based on an annual revenue growth rate of 15.6% and an earnings increase of $20.6 billion from current earnings of $71.5 billion.

Uncover how Meta Platforms' forecasts yield a $863.20 fair value, a 20% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community’s fair value estimates for Meta Platforms span from US$527 to over US$1,098 based on 104 individual forecasts. Many agree that AI-powered gains in ad targeting are crucial, but differing confidence in execution creates a broad range you may want to explore for yourself.

Explore 104 other fair value estimates on Meta Platforms - why the stock might be worth as much as 53% more than the current price!

Build Your Own Meta Platforms Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• Our free Meta Platforms research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Meta Platforms' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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