Meta’s AI May Not Be as Good for Ad Growth as Investors Think

Meta Platforms has been this year’s artificial intelligence darling. The Facebook and Instagram parent’s shares are up roughly 24% so far in 2025, despite CEO Mark Zuckerberg’s declaration last month that the company would lift capital expenditures 60%, mostly to pay for AI development. The rally in Meta’s stock contrasts sharply with the anemic stock performance of other tech companies with similarly lavish AI capex plans, like Google, Microsoft and Amazon.

One explanation for the varying performances is the belief among investors that Meta’s investments in developing new AI-powered content creation and ad targeting tools will result in the “persistent growth” of its ad business in the coming years, said Gene Munster, a Meta investor and managing partner at Deepwater Asset Management. There’s not as much optimism about the prospects of the other tech giants that are investing heavily in AI. For instance, MoffettNathanson analyst Michael Nathanson said in a report that “the rapid emergence of OpenAI” and other AI applications “could reduce Google’s future search advertising growth.”