Nauman Khan

Sat, March 28, 2026 at 11:30 AM EDT 6 min read

Big tech stocks have been treading water after last year’s surge, especially as companies pour billions into AI and data centers. Meta Platforms (META), the Facebook parent, has felt the pressure. Ad revenue growth is cooling from its pandemic peak, and Meta is ramping up spending on AI “superintelligence.” In that context comes the latest jolt when Meta confirmed it will cut “several hundred” jobs across units like sales, recruiting, and its Reality Labs VR arm. The company is also under increasing legal pressure from regulators.

The question now for investors is whether, with AI (and legal) costs mounting and layoffs announced, META stock looks like a buy, sell, or hold? Let's try to find out.

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Meta Platforms is one of the world’s largest social media and ad-tech companies. It has 3.6 billion daily users and generates almost all its revenue from the Family of Apps segment. Its Reality Labs unit, VR/AR headsets, etc., is tiny by revenue, about 1% of the total, but has accumulated massive losses. CEO Mark Zuckerberg is now shifting focus toward AI, even as he seeks efficiency in the core business.

Recently, Meta delayed the rollout of its next big AI model, “Avocado,” after internal tests lagged Google’s (GOOG) (GOOGL) top models. Meta reiterated it’s on a “rapid trajectory” for better models and said more will roll out steadily. The company also acquired an AI-wearable startup, Limitless, to advance its “personal superintelligence” vision.

For now, Meta is following new EU rules, letting users choose fewer personalized ads, and addressing AI chat concerns. It’s using AI internally while keeping public launches compliant.

META’s stock rallied on a few past headlines, like AI progress and earnings beats in the past year, which were not enough to sustain these gains in 2026; now it is down roughly 20% year to date (YTD). The pullback signals investor concerns over slowing ad trends and heavy spending on AI and the metaverse.

From a valuation perspective, META remains richly priced, as its forward P/E is about 21×, well above typical tech/media peers 13×, and its EV/EBITDA is 15× versus an industry average around 11×. It means the stock trades at a premium on expectations of strong future growth and profits.