Meta Stock Slips After Zuckerberg Admits AI Progress Has Been Slower Than Expected

Yiannis Zourmpanos

Tue, July 7, 2026 at 7:51 AM PDT 4 min read

Artificial intelligence has been the leading story of Meta Platforms (META), with Meta receiving praise (and critique) from the market for allocating up to $145 billion in capital expenditures to invest in building AI infrastructure. That story received new fodder for the bears last week when CEO Mark Zuckerberg commented during an internal town hall that AI agent development of Meta hasn't been moving "in the way we expected" over the past four months.

That comment came just a few days after the news that Meta intends to rent extra AI computing capacity through the cloud business, raising questions on whether AI infrastructure investments are outpacing the demand. Nevertheless, the company keeps generating impressive cash flow through its highly profitable advertising business, thus having much more financial flexibility compared to most of its rivals focused on developing AI infrastructure.

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About Meta Stock

Meta Platforms is among the world's largest technology firms and owns such famous services as Facebook, Instagram, WhatsApp, Messenger, Threads, and a wide range of products based on artificial intelligence. Headquartered in Menlo Park, California, META has a market cap of approximately $1.47 trillion and is one of the largest public firms on the planet.

Despite the recent rise, META stock is still lagging compared to its 52-week peak. The share price has jumped by more than 8% over the last five trading days and is trading now approximately 18% above its 52-week low level, while the stock is still 23% away from its 52-week high. The weakness in META stock is caused by doubts of investors about the pace of the return of capital invested by Meta in its AI projects while the overall digital advertising business is still incredibly profitable.

If looking at the valuations, META is trading with relatively moderate ratios for the firm posting revenue growth above 30%. The stock is trading at 20x P/E and 19.8x forward P/E ratios, together with a PEG ratio of 1.03. Considering also that the company has a 36.9% ROE, 30.1% profitability, and 0.24 debt/equity ratio, the valuation looks rather moderate compared to many other AI-focused technology rivals despite its huge investments.