Meta Platforms (META) suffered a setback late last week when it reported delays in the launch of its new foundational AI model, Avocado. According to reports, the company’s AI model underperforms leading competitors like Alphabet’s (GOOGL) Google, OpenAI, and Anthropic across multiple benchmarks, including writing, coding, and reasoning. Despite showing great improvements over its previous versions, Meta believes the model is not worthy of a launch right now.
Meta Platforms said that it will need at least until May to launch Avocado. This is disappointing for META stock shareholders, as Meta was projected to spend $135 billion on AI investments in 2026, almost twice what it spent in 2025. The company also has a history of big failures, with its metaverse project registering more than $70 billion in operating losses. Having said that, this is a price worth paying when a company has the ambition of leading today’s open source AI developments.
In the coming days, analysts will react to the impact of Meta’s AI investments, and the company will need to compensate for the delays somewhere, bringing more clarity for shareholders.
Meta Platforms is the owner of popular social platforms like Facebook, Instagram, and WhatsApp. The company offers highly targeted advertising capabilities to businesses, based mainly on data collected from the billions of users that use its apps every day. Meta Platforms is headquartered in Menlo Park, California.
META stock had a volatile 2025, and it has only returned 3% over the last 12 months. The stock has suffered mainly due to the uncertainty surrounding its AI investments, despite the fact that it was one of the few companies that had a measurable return on investment (ROI) on its AI investments in the early part of the AI revolution. The Avocado debacle shows why investors may be hesitant to back Meta’s AI bets, even when the company is in a strong financial position to do so.
Wall Street has often criticized Meta for its huge investments in new ventures. When these ventures lose money, the company takes the blame. However, few point out that the reason it can afford to make these mistakes is its dominance in the social media arena. The firm owns WhatsApp, Facebook, Threads, and Instagram. Earlier in the year, it reported that more than 3.5 billion people use at least one of its platforms. With such a vast user base, the company can tap into multiple avenues to make up for money lost in any of its new ventures.
