Ackman's Pershing Square Acquires Stake in Meta, AI Potential Undervalued
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Investment Strategy: Ackman's Pershing Square acquired approximately 10% of Meta by the end of 2025, believing that the current share price undervalues the company's long-term potential in AI, thus presenting a deeply discounted investment opportunity for stakeholders.
- New Investment Moves: Over the past 12 months, Pershing Square has also taken new stakes in Amazon and Hertz, reflecting ongoing confidence and strategic positioning within the tech sector, which may further enhance the market performance of these companies.
- Growing Cloud Demand: Cloudflare CEO Matthew Prince highlighted that the proliferation of AI is driving increased demand for the company's networking and security products, indicating a fundamental replatforming of the internet that provides new growth momentum for Cloudflare.
- ByteDance AI Chip Initiative: ByteDance is in talks with Samsung to produce an AI chip it is developing, aiming to receive sample chips by the end of March and eventually manufacture 350,000 units, although the company has stated that information about the project is inaccurate, indicating its active exploration in the AI domain.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for META is 824.71 USD with a low forecast of 655.15 USD and a high forecast of 1117 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 670.720
Low
655.15
Averages
824.71
High
1117
Current: 670.720
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Major Investment Initiative: Meta announced the groundbreaking of a $10 billion data center in Indiana, aimed at meeting its growing computing needs for artificial intelligence, thereby enhancing its competitive edge in the AI sector.
- Computing Power Expansion: The construction of this data center will provide Meta with the massive computing power required to support the rapid development of its AI projects, significantly boosting its data processing and analytical capabilities.
- Strategic Positioning: By investing in Indiana, Meta not only optimizes its global infrastructure but also strengthens its market position in the Midwest, enhancing its capacity to support future technological advancements.
- Industry Impact: This move signifies Meta's ambitious goals in the AI domain, expected to drive innovation and application of related technologies, while potentially attracting more investor interest in its long-term growth prospects.
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- Legal Case Context: The case involves a plaintiff and her mother alleging that features designed by Meta and others have led to mental health issues in teenagers, although Meta argues that the plaintiff faced significant challenges before using social media, highlighting the complexity of legal responsibility.
- Digital Filter Controversy: In court, Mosseri mentioned the company's discussions on whether to ban digital filters that could encourage plastic surgery, ultimately deciding against such effects, reflecting the company's balancing act between cultural relevance and business competitiveness.
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- Investor Confidence Boost: Pershing Square's annual investor presentation highlighted that concerns over Meta's AI-related spending underestimate the company's long-term growth potential, particularly regarding its scalable and high-quality advertising business model.
- Significant Capital Expenditure Increase: Meta's latest quarterly report projects capital expenditures for 2026 to be between $115 billion and $135 billion, a substantial rise from $72.22 billion last year, indicating the company's commitment to AI infrastructure.
- AI Investment Strategy: Meta is constructing a data center in Lebanon, Indiana, with an investment exceeding $10 billion, aimed at supporting its AI workloads, which underscores the company's ongoing investment and infrastructure expansion in the AI sector.
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See More
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- iOS 26.4 Testing Status: The beta version of iOS 26.4, expected to launch in late February, was set to include a redesigned interface and improved natural language comprehension for Siri, but due to testing issues, some features may be postponed until the May update or the September release of iOS 27.
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- User Sentiment Analysis: On the Stocktwits platform, retail sentiment around AAPL has turned bearish, yet some users believe that the AI rollout delay will not affect Apple's long-term growth potential, reflecting ongoing market interest in AI developments.
See More
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- Brand Demand Drivers: The company highlighted that its iconic brands, Ray-Ban and Oakley, are pivotal in driving the AI glasses revolution, particularly with the recent launch of Oakley's smart glasses, which has significantly boosted consumer interest.
- Deepening Tech Collaboration: Since 2019, EssilorLuxottica has partnered with Meta to develop wearable devices, with the latest Ray-Ban iteration featuring gesture and neural technology control, retailing at $799, showcasing the synergy between technological innovation and market demand.
- Production Capacity Expansion: Meta and EssilorLuxottica are in discussions to double production, aiming to manufacture at least 20 million AI glasses by the end of the year to meet surging market demand, reflecting both companies' strong commitment to future collaboration.
See More
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- Major Investment Initiative: Meta announced the groundbreaking of a $10 billion data center in Indiana, aimed at meeting its growing computing needs for artificial intelligence, thereby enhancing its competitive edge in the AI sector.
- Computing Power Expansion: The construction of this data center will provide Meta with the massive computing power required to support the rapid development of its AI projects, significantly boosting its data processing and analytical capabilities.
- Strategic Positioning: By investing in Indiana, Meta not only optimizes its global infrastructure but also strengthens its market position in the Midwest, enhancing its capacity to support future technological advancements.
- Industry Impact: This move signifies Meta's ambitious goals in the AI domain, expected to drive innovation and application of related technologies, while potentially attracting more investor interest in its long-term growth prospects.
See More
CEOs Warn of Market Correction Risks
- Market Correction Warning: At a financial summit on November 4, Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick warned of a potential 10% to 20% market correction within the next year, leading to a 1.4% decline in the Nasdaq over three months, reflecting investor concerns about market overheating.
- Tech Stock Underperformance: Despite Microsoft reporting a 60% year-over-year profit increase, its stock fell 10% last month, primarily because analysts deemed its 39% year-over-year growth in cloud services insufficient, indicating heightened caution regarding tech stock valuations.
- Earnings vs. Stock Price Divergence: Over the past three months, while 95% of information technology companies exceeded earnings expectations, the Nasdaq's average P/E ratio dropped from 34 to 27.45, suggesting a weakening investor confidence in tech stocks as they become more cautious in response to earnings growth.
- Historical Correction Frequency: Historically, market corrections of 10% have occurred on average once a year since 1950, with 20% corrections happening every three to five years; although a correction has not yet materialized, the executives' warnings may prompt investors to reassess the investment value of tech stocks.
See More
Instagram CEO Testifies on Social Media Usage and Mental Health
- Social Media Usage Issues: Instagram CEO Adam Mosseri testified in Los Angeles that while social media use can be problematic, he does not consider it an addiction, emphasizing the importance of personal feelings in usage frequency, which has sparked widespread public discussion about social media's impact.
- Legal Case Context: The case involves a plaintiff and her mother alleging that features designed by Meta and others have led to mental health issues in teenagers, although Meta argues that the plaintiff faced significant challenges before using social media, highlighting the complexity of legal responsibility.
- Digital Filter Controversy: In court, Mosseri mentioned the company's discussions on whether to ban digital filters that could encourage plastic surgery, ultimately deciding against such effects, reflecting the company's balancing act between cultural relevance and business competitiveness.
- Transparent Decision-Making: Mosseri revealed email exchanges with Meta executives regarding the policy on digital filters, indicating his decision-making process; despite risks, he preferred an option that minimized user experience impact, underscoring the delicate balance between protecting minors and business interests.
See More
Confidence in Meta's Long-Term Potential Amid AI Spending Concerns
- Investor Confidence Boost: Pershing Square's annual investor presentation highlighted that concerns over Meta's AI-related spending underestimate the company's long-term growth potential, particularly regarding its scalable and high-quality advertising business model.
- Significant Capital Expenditure Increase: Meta's latest quarterly report projects capital expenditures for 2026 to be between $115 billion and $135 billion, a substantial rise from $72.22 billion last year, indicating the company's commitment to AI infrastructure.
- AI Investment Strategy: Meta is constructing a data center in Lebanon, Indiana, with an investment exceeding $10 billion, aimed at supporting its AI workloads, which underscores the company's ongoing investment and infrastructure expansion in the AI sector.
- Market Reaction Analysis: Despite a more than 7% decline in Meta's stock price over the past year, investor sentiment remains optimistic about its future potential, with some users predicting a surge to $1000 per share, reflecting a reassessment of the company's value.
See More
Apple's Siri Update Faces Delays Amid Testing Issues
- Siri Update Delay: Apple has encountered instability in Siri's query processing during testing, potentially delaying the planned March feature updates to future versions, which could impact user experience and competitive positioning.
- iOS 26.4 Testing Status: The beta version of iOS 26.4, expected to launch in late February, was set to include a redesigned interface and improved natural language comprehension for Siri, but due to testing issues, some features may be postponed until the May update or the September release of iOS 27.
- Market Reaction: Despite the challenges facing the Siri update, AAPL shares rose approximately 1% at the time of reporting, indicating market confidence in Apple's long-term business health, although short-term impacts may be felt.
- User Sentiment Analysis: On the Stocktwits platform, retail sentiment around AAPL has turned bearish, yet some users believe that the AI rollout delay will not affect Apple's long-term growth potential, reflecting ongoing market interest in AI developments.
See More
EssilorLuxottica's AI Glasses Sales Surge Over 300%
- Sales Surge: EssilorLuxottica reported selling over 7 million AI glasses last year, a staggering increase of over 300% compared to the combined sales of 2 million in 2023 and 2024, indicating a rapid rise in consumer demand for wearable AI devices.
- Brand Demand Drivers: The company highlighted that its iconic brands, Ray-Ban and Oakley, are pivotal in driving the AI glasses revolution, particularly with the recent launch of Oakley's smart glasses, which has significantly boosted consumer interest.
- Deepening Tech Collaboration: Since 2019, EssilorLuxottica has partnered with Meta to develop wearable devices, with the latest Ray-Ban iteration featuring gesture and neural technology control, retailing at $799, showcasing the synergy between technological innovation and market demand.
- Production Capacity Expansion: Meta and EssilorLuxottica are in discussions to double production, aiming to manufacture at least 20 million AI glasses by the end of the year to meet surging market demand, reflecting both companies' strong commitment to future collaboration.
See More
