Meta Platforms gets a downgrade from JPMorgan on massive AI spending forecast

Meta Platform faces a "challenging path" to capitalizing on its costly artificial intelligence as competition in the space heats up, according to JPMorgan. The investment bank downgraded Meta to neutral from overweight. It also slashed its price target on shares to $725 from $825, implying 8% upside from Wednesday's close. Meta reported better-than-expected Q1 results Wednesday after the bell. However, the stock shed more than 9% after the company hiked its full-year capital expenditures outlook to a range of $125 billion to $145 billion. That's up from a previous guidance of $115 billion to $135 billion. "While we're encouraged by META's +33% Y/Y revenue growth which has been supported by AI-driven ad stack optimizations, accelerating impression growth, & engagement gains, we believe full-stack AI competition is intensifying and Meta has a more challenging path to returns on heavy AI capex beyond advertising," analyst Doug Anmuth said in a note to clients. "Shares could remain pressured as investors look for greater clarity on agentic products and how Muse models will help drive incremental revenue beyond advertising," Anmuth wrote. META 5D mountain META falls Meta unveiled a sweeping strategy to refashion itself into a leader in the AI industry last June. As part of those efforts, the company has spun up its AI-focused unit Meta Superintelligence Labs , plowing more than $14 billion into acquiring the start up Scale AI and poaching its CEO Alexandr Wang. …