Meta stock steadies near $750 as AI spending surge tests investor patience

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Meta holds near $750

Highlights

- Meta holds steady near $750 as investors digest higher AI-related capital spending.

- Revenue rises 26% in Q3 but costs surge 32%, straining short-term profitability.

- Technicals show stability above key EMAs, with resistance forming near $780–$800.

While Meta reported a 26% jump in Q3 revenue, expenses climbed 32%, and a one-time $16 billion charge linked to President Trump’s “Big Beautiful Bill” further distorted profitability metrics. Excluding the charge, Meta’s earnings growth remained solid, underscoring the resilience of its core business.

Chart structure points to steady base formation

Technically, Meta’s stock has stabilized following September’s sharp pullback from above $800. The price action is consolidating near $750, comfortably above the 20-day EMA at $735 and the 50-day EMA at $720. These levels form the immediate cushion for bulls, while the 100-day and 200-day EMAs, near $699 and $680 respectively, mark deeper support in the event of renewed weakness.

Meta stock price dynamics (Source: TradingView)

The broader trend remains constructive, with the stock continuing to respect a long-term rising channel established in April. A breakout above $760 would confirm renewed bullish momentum, setting up potential retests of $780 and $800. On the downside, a decisive close below $720 could invite a retest of the 200-day EMA, coinciding with the lower boundary of the current trend channel.

Momentum readings also show signs of recovery. The RSI near 59 reflects improving sentiment after the recent correction but still leaves room for further upside before overbought conditions emerge. Sustained readings above 60 would strengthen the bullish outlook.

AI ambitions raise both promise and pressure

Meta’s commitment to front-load AI investment has become the defining narrative for the stock. The company guided 2025 capital expenditure at $70–$72 billion, with spending expected to climb further in 2026 as it builds new AI data centers. CFO Susan Li emphasized that these investments are aimed at expanding computing power and model development to support Meta’s family of apps and its next-generation AI systems.

While the plan places Meta alongside Alphabet and Microsoft in the AI infrastructure race, it has reignited debate over valuation and cash flow pressures. Analysts warn that elevated spending could temporarily compress margins, even as AI tools enhance long-term competitiveness across advertising and user engagement.

At the same time, Meta’s underlying fundamentals remain robust. Its global user base of more than 3.5 billion continues to deliver strong ad monetization, while WhatsApp and Instagram Reels are showing early signs of accelerating revenue contribution. Threads, Meta’s X rival, is gradually gaining traction, though its financial impact remains modest.

Outlook: Balancing growth and discipline

Meta’s stock sits at a technical crossroads. As long as it holds above the $735–$720 support zone, the broader uptrend remains intact. A push through $760 would reestablish momentum toward the $780–$800 resistance range, while failure to maintain current support could expose the $680 level.

For investors, the near-term challenge is reconciling Meta’s long-term AI vision with short-term earnings headwinds. The company’s strategy to invest heavily in supercomputing infrastructure reinforces its leadership ambitions in the AI ecosystem, but it also introduces volatility as Wall Street adjusts expectations for margins and cash flow.

As previously discussed, Meta’s strong fundamentals and dominant advertising engine provide a buffer against cyclical headwinds. However, the stock’s next major move will likely hinge on the pace of AI returns versus the burden of sustained spending — a balance that could define its trajectory into 2025.

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