Meta Platforms (META) is building a large new data center in El Paso, Texas, as part of its plan to expand into artificial intelligence. More specifically, the social media company shared in a blog post on Wednesday that it will spend over $1.5 billion on the project, which will eventually have 1 gigawatt of power to run high-end AI chips. Furthermore, a Meta spokesperson stated that the center is expected to be up and running by 2028. It is worth mentioning that the Texas facility is only one of several big investments that Meta is making in AI infrastructure.
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Earlier this year, the company announced a huge data center in Louisiana called “Hyperion,” which former President Donald Trump said could cost up to $50 billion. Notably, Meta raised $29 billion for that project from Pacific Investment Management and Blue Owl Capital (OWL). The company is also working on other gigawatt-sized sites, including one in Ohio named “Prometheus.”
Unsurprisingly, CEO Mark Zuckerberg believes that AI assistants will become “one of the most important and valuable services” ever created. Therefore, Meta plans to spend up to $72 billion this year on capital projects, much of it for AI. While some experts worry that companies may be building too much, Zuckerberg told Bloomberg in 2024 that it’s better to risk overspending than miss out on what he sees as the most important technology for the next 10 to 15 years.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 40 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $878.64 per share implies 22.5% upside potential.
