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META Taps AMD GPUs to Build AI Infra: What's Ahead for the Stock?
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Key Takeaways
META struck a 6-GW AMD Instinct GPU deal to power AI training, inference and data center expansion.
META plans $115B-$135B in 2026 capex and nuclear pacts to secure 6.6 GWs of power by 2035.
Meta Platforms faces rising ad competition from Alphabet and Amazon despite AI-driven gains.
Meta Platforms (META - Free Report) is spending heavily on building its AI infrastructure, and the latest deal with AMD for 6-Gigawatts (GWs) of Instinct GPUs is a step towards that direction. The first deployment will see Meta Platforms’ use of custom MI450, along with 6th-generation EPYC CPUs, codenamed “Venice,” running on ROCm software and built on the AMD Helios rack-scale architecture. AMD and Meta Platforms are also expanding their CPU partnership, with the former set be a lead customer for both Venice and “Verano,” a next-generation of EPYC processors.
The latest deal follows META’s collaboration with NVIDIA under which the latter will support META’s build-out of data centers optimized for AI training and inference, as well as its core business. META’s data centers are pivotal to bringing personal superintelligence and a better app experience to everyone across its platforms. These data centers consume huge amounts of electricity, and META is now tapping nuclear energy to fulfill this requirement. The company has signed long-term nuclear power agreements with Vistra, TerraPower and Oklo that are designed to supply up to 6.6 GWs of nuclear electricity by 2035.
Meta Platforms now expects 2026 capital spending between $115 billion and $135 billion. Per CNBC, Alphabet (GOOGL - Free Report) , Meta Platforms, Amazon and Microsoft (MSFT - Free Report) on a combined basis are expected to spend roughly $700 billion on developing AI infrastructure in 2026. META’s improved recommendation system is driving up user engagement. AI usage is making the company a popular name among advertisers. Meta Platforms now expects to invest significantly more over the next few years in developing more advanced models and the largest AI services in the world.
META’s expanding AI footprint is expected to boost user engagement across its platforms. The company expects to advance the capabilities of underlying media generation models and ship new features to further enhance the product experience in 2026. Focus on expanding personalization on Meta AI is expected to help the company understand user interests and preferences as well as identify the most relevant content across META platform. The company has started testing Meta AI business assistant with advertisers, which helps with tasks like campaign optimization and account support. Meta Platforms expects total revenues between $53.5 billion and $56.5 billion for the first quarter of 2026.
META Faces Tough Competition in Ad Space
Meta Platforms is facing tough competition from Alphabet and Amazon in the advertising domain.
Alphabet’s Search business is benefiting from AI infusion. The company has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. AI Overviews and AI Mode are driving overall queries and commercial queries, thereby driving monetization opportunities.
Amazon’s rich partner base is allowing advertisers to buy ad space on Netflix, Spotify and SiriusXM Media through Amazon Ads, thereby expanding its advertising reach beyond its own properties. The strong performance in advertising reflects successful AI-powered optimization of the platform and growing market share in digital advertising.
Meta Platforms shares have plunged 12.6% in the trailing 6 month period, underperforming the broader Zacks Computer and Technology sector’s return of 9.5%.
META’s Stock Performance
Image Source: Zacks Investment Research
Meta Platforms stock is trading at a premium, with a forward 12-month price/sales of 6.50X compared with the broader sector’s 6.43X. META has a Value Score of C.
META Stock Trades at a Premium
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $6.67 per share, up a couple of cents over the past 30 days, suggesting 3.7% year-over-year growth.
View the Zacks #1 Rank List
Image: Bigstock
META Taps AMD GPUs to Build AI Infra: What's Ahead for the Stock?
Key Takeaways
Meta Platforms (META - Free Report) is spending heavily on building its AI infrastructure, and the latest deal with AMD for 6-Gigawatts (GWs) of Instinct GPUs is a step towards that direction. The first deployment will see Meta Platforms’ use of custom MI450, along with 6th-generation EPYC CPUs, codenamed “Venice,” running on ROCm software and built on the AMD Helios rack-scale architecture. AMD and Meta Platforms are also expanding their CPU partnership, with the former set be a lead customer for both Venice and “Verano,” a next-generation of EPYC processors.
The latest deal follows META’s collaboration with NVIDIA under which the latter will support META’s build-out of data centers optimized for AI training and inference, as well as its core business. META’s data centers are pivotal to bringing personal superintelligence and a better app experience to everyone across its platforms. These data centers consume huge amounts of electricity, and META is now tapping nuclear energy to fulfill this requirement. The company has signed long-term nuclear power agreements with Vistra, TerraPower and Oklo that are designed to supply up to 6.6 GWs of nuclear electricity by 2035.
Meta Platforms now expects 2026 capital spending between $115 billion and $135 billion. Per CNBC, Alphabet (GOOGL - Free Report) , Meta Platforms, Amazon and Microsoft (MSFT - Free Report) on a combined basis are expected to spend roughly $700 billion on developing AI infrastructure in 2026. META’s improved recommendation system is driving up user engagement. AI usage is making the company a popular name among advertisers. Meta Platforms now expects to invest significantly more over the next few years in developing more advanced models and the largest AI services in the world.
META’s expanding AI footprint is expected to boost user engagement across its platforms. The company expects to advance the capabilities of underlying media generation models and ship new features to further enhance the product experience in 2026. Focus on expanding personalization on Meta AI is expected to help the company understand user interests and preferences as well as identify the most relevant content across META platform. The company has started testing Meta AI business assistant with advertisers, which helps with tasks like campaign optimization and account support. Meta Platforms expects total revenues between $53.5 billion and $56.5 billion for the first quarter of 2026.
META Faces Tough Competition in Ad Space
Meta Platforms is facing tough competition from Alphabet and Amazon in the advertising domain.
Alphabet’s Search business is benefiting from AI infusion. The company has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. AI Overviews and AI Mode are driving overall queries and commercial queries, thereby driving monetization opportunities.
Amazon’s rich partner base is allowing advertisers to buy ad space on Netflix, Spotify and SiriusXM Media through Amazon Ads, thereby expanding its advertising reach beyond its own properties. The strong performance in advertising reflects successful AI-powered optimization of the platform and growing market share in digital advertising.
META’s Share Price Performance, Valuation & Estimates
Meta Platforms shares have plunged 12.6% in the trailing 6 month period, underperforming the broader Zacks Computer and Technology sector’s return of 9.5%.
META’s Stock Performance
Image Source: Zacks Investment Research
Meta Platforms stock is trading at a premium, with a forward 12-month price/sales of 6.50X compared with the broader sector’s 6.43X. META has a Value Score of C.
META Stock Trades at a Premium
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $6.67 per share, up a couple of cents over the past 30 days, suggesting 3.7% year-over-year growth.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Meta Platforms currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.