Is Meta's AI spending blitz working? The stock's next move depends on the answer

Shares of Meta Platforms are recovering from a bruising stretch earlier this year, when investors shied away from the social media giant's massive investment in artificial intelligence. Wednesday's earnings will determine whether that rebound will continue. The stakes are high: Meta is in the midst of one of the most aggressive AI buildouts of all the megacaps. In recent weeks, the Facebook and Instagram parent laid out investments spanning cloud infrastructure and custom chips and inked massive compute commitments — all part of the company's plan to spend as much as $169 billion this year, most of which will go to artificial intelligence. Investors are increasingly focused on whether all that spending is paying off yet. So far, the market hasn't known quite how to digest Meta's ambitious plans. The stock initially jumped after its quarter on Jan. 28, when management forecast 2026's operating and capital spending would be materially above expectations and would account for nearly all of the 2026 productivity and revenue growth. For a moment, investors cheered and the stock closed at $738. Then the market turned chilly. Shares fell roughly 29% in two months, to $525 in late March. But shares have risen 28% since then, ending Tuesday at $671. While some of that gain was driven by the broader market's recovery from the March 30 Iran war bottom, investors also seemed optimistic about a series of announced investments aimed at increasing Meta's compute capacity. …