Arete Research downgraded $META from Buy to Neutral on Thursday and lowered its price target from $732 to $676

The firm warns that the company’s massive AI infrastructure spending could hurt margins without a clear path to monetization
The downgrade focuses on Meta’s plan to spend between $115 billion and $135 billion in capital expenditures in 2026, nearly double the $72.2 billion it spent the previous year
Arete argued that Meta’s expenses are rising faster than its revenue and that the company does not have the same pool of third-party demand that Google and Amazon benefit from through their cloud businesses
AWS and Google Cloud generate tens of billions in revenue by selling computing capacity to outside customers, which helps justify their data center investments. Meta, by contrast, must generate returns from that spending through its own ad-driven platforms