Meta Platforms downgraded to Hold at Benchmark on ‘runaway capex’

Benchmark downgraded Meta Platforms (META) to Hold from Buy and removed the firm’s prior price target. Meta is certainly pursuing AI investments outside ads, but returns are less certain against fresh, comparably capitalized competition including OpenAI, Google (GOOGL), Tesla (TSLA), and other frontier AI labs, the analyst tells investors. Despite Meta’s still dominant global ad presence, near-term operating expense and near and long-term capex inflections point to consecutive ROIC declines at least through 2027, the analyst added. The firm views shares as “rangebound at best” until a sensible return case can be made for “thus far runaway capex.”