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I keep hitting the buy button on Meta Platforms (NASDAQ:META | META Price Prediction), and the reason is the exact thing most investors are getting wrong about AI right now. When Mark Zuckerberg raised the 2026 capex guide to $125 to $145 billion, the crowd read panic. I read validation. Meta is racing to satisfy demand that its own CFO admits keeps outrunning the plan.
That is the core of my thesis. On the Q1 call, Susan Li said it plainly: “we have continued to underestimate our compute needs even as we have been ramping capacity significantly.” When the operator of a $1.7 trillion advertising machine tells you compute is scarce inside her own building, the AI demand debate is settled for me. The Meta Compute pivot into commercial bare-metal rental, backed by the $13 billion, 1-gigawatt data center expansion in Alberta, is a company selling shovels because the miners keep showing up.
The Numbers That Keep Me Adding
Q1 2026 revenue came in at $56.311 billion, up 33.08% year over year, with ad impressions up 19% and average price per ad up 12%. That was the fifth consecutive quarter beating EPS expectations. Family daily active people reached 3.56 billion. The apps are growing users and pricing at the same time, which is rare at this scale.
Profitability is the second reason. Return on equity runs 32.9%, operating margin 40.6%, and net margin 32.8%. This balance sheet can absorb the buildout without breaking.
Third, the price. I am paying a forward P/E of 21 and a PEG of 0.967 for a business that grew quarterly earnings 62.4% year over year. Analyst consensus sits at $828.34 with 49 buys, 8 strong buys, 6 holds, and zero sells.
Why Meta and Not Alphabet
Alphabet (NASDAQ:GOOGL) is the alternative every reader will reach for first. I own some. I keep adding to Meta instead. Morningstar’s 2026 outlook pegs Alphabet’s 2026 estimated capex at $92.9 billion versus Meta’s $96.97 billion. Meta is committing more capital to infrastructure than Alphabet while carrying a lower forward multiple and posting faster revenue growth. Alphabet also has to defend search against the same generative models Meta gets to weave into a feed nobody is threatening to disrupt. Meta’s ad surface benefits from AI. Search has to survive it. (Related reading: 7 Stocks Powering the AI Boom.)
The Risk I Am Not Ignoring
Reality Labs lost $4.03 billion in Q1 on $402 million of revenue. Youth-related litigation has additional trials scheduled in 2026 that may result in material loss. Capex at this pace already pushed full-year 2025 free cash flow lower even as operating cash flow expanded. The thesis holds because the core ad engine funds every one of these bets in cash, quarter after quarter, without touching the balance sheet. Free cash flow still came in at $12.386 billion in Q1 with capex up 46.8%.
What Keeps My Buy Button Active
“Every sign that we are seeing in our own work and across the industry gives us confidence in this investment,” Zuckerberg told analysts. I believe him because the receipts back him: five straight beats, a forward multiple in the low 20s, a compute pivot the market is misreading, and 3.56 billion humans he already reaches every day. I will keep adding Meta as long as demand keeps outrunning capacity, and right now that gap is widening.
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