• In May 2026, Meta Platforms began laying off about 8,000 employees, roughly 10% of its workforce, while sharply increasing AI-related capital spending and reorganizing teams to prioritize artificial intelligence across its business.
• This combination of workforce cuts, large-scale AI infrastructure investment, and new AI monetization efforts such as paid Meta AI subscriptions highlights a decisive shift in how Meta allocates resources and manages long-term risks around regulation, safety, and growth.
• We’ll now examine how Meta’s decision to cut roughly 10% of its workforce to fund heavier AI investment reshapes its investment narrative.

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Meta Platforms Investment Narrative Recap

To stay a shareholder in Meta today, you need to believe its heavy AI spending and aggressive cost cuts can translate into durable earnings, without undermining its core ad business. The May 2026 layoffs, tied to AI capex running up to US$145 billion this year, sharpen that trade off: the key near term catalyst is turning AI into paid products and better ads, while the biggest risk is expenses and regulatory pressures outpacing monetization. So far, this news does not appear to fundamentally change that balance.

The most relevant recent move is Meta’s rollout of paid Meta AI subscriptions and Plus tiers for Facebook, Instagram and WhatsApp. For me, this sits right at the heart of the current catalyst: proving that billions of users can be nudged toward new, recurring AI driven revenue streams, just as investors are watching every dollar of AI capex and every headline on child safety and content governance.

Yet beneath the AI opportunity, investors also need to weigh intensifying legal and regulatory pushback around child safety and teen engagement on Meta’s platforms...

Meta Platforms' narrative projects $366.7 billion revenue and $110.6 billion earnings by 2029. This requires 19.5% yearly revenue growth and a $40.0 billion earnings increase from $70.6 billion today.

Uncover how Meta Platforms' forecasts yield a $829.23 fair value, a 35% upside to its current price.

Exploring Other Perspectives

Before the layoffs, the most optimistic analysts were penciling in revenue of about US$381 billion and earnings of roughly US$122 billion by 2029, while also warning that massive AI and datacenter spending without clear monetization could squeeze margins, so you should expect that both bullish and cautious views may shift as this new cost cutting and AI push plays out.

Explore 54 other fair value estimates on Meta Platforms - why the stock might be worth just $689.41!

The Verdict Is Yours

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your Meta Platforms research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• 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.