Meta's flurry of AI initiatives this month hasn't helped lift the stock. What will?

Meta Platforms unveiled a flurry of AI initiatives this month — from lower-cost smart glasses and an enterprise tool for businesses to plans to build a prediction-markets app and a key partnership with Qualcomm to bolster its computing power. But none of it has seemed to connect with investors. The social media giant's stock remains one of the worst-performing mega-cap stocks this year, down more than 17%. Among the "Magnificent Seven," only Microsoft has done worse, down 26%. Wall Street analysts say the reason is simple: Investors are no longer judging Meta by how much AI-related stuff it can create; they're waiting to see whether those products and services will generate enough sales and earnings to justify the company's aggressive spending on data centers. That AI investment cycle, among the highest ever capital expenditures, is the "elephant in the room" that the Street is focused on, Piper Sandler analyst Thomas Champion told CNBC. "Most analysts are quite positive on Meta's core ad business, but we know that they're investing very aggressively on a capex basis, and so the cash flow is basically going to zero," he said. Meta's first-quarter results, reported on April 29, reinforced those concerns. The company raised its capital spending guidance for fiscal 2026 to $125 billion to $145 billion, a $10 billion increase at the midpoint to $135 billion, due to rising costs for memory, chips, and other components needed for data centers. …