A New Report Says Meta Platforms Could Overtake Google AI. How to Play META Stock Here.

Alphabet's (GOOG) (GOOGL) Google has spent the past few years establishing itself as one of the biggest forces in artificial intelligence (AI). From expanding Gemini across Search, Workspace, and Android to investing heavily in custom TPUs and next-generation data centers, the tech giant has built a powerful AI ecosystem backed by world-class models, massive computing resources, and billions of users.

But the AI race is only getting more competitive. Meta Platforms (META), the parent company of Facebook, Instagram, WhatsApp, and Threads, has ruled a digital empire. Now, it is betting big on AI with an aggressive push to become one of the industry's top AI players. Under CEO Mark Zuckerberg, it has committed billions of dollars to AI infrastructure, custom chips, top-tier talent, and a network of gigawatt-scale data centers designed to dramatically increase its computing power. Meta is also accelerating the rollout of new AI models and developer tools as it races to build more capable AI agents.

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That strategy is beginning to turn heads on Wall Street. A new report from boutique research firm SemiAnalysis argues that Meta's aggressive infrastructure buildout and expanding AI compute capacity could allow it to surpass Google's AI capabilities within the next six months. Further, the report projects that Meta could overtake both OpenAI and Anthropic in total AI compute by year-end, thanks to its massive data center expansion and proprietary AI training ecosystem. The bullish assessment sent META shares higher and has investors asking whether Meta could become the next AI leader.

To that end, let's see how investors should play META stock here.

Meta Platforms hardly needs an introduction. Born as Facebook in 2004, the company has evolved far beyond its dorm-room origins into a global digital ecosystem spanning Instagram, WhatsApp, Messenger, and now Threads. What began as a simple newsfeed has steadily transformed into a platform shaping the ways in which billions communicate, create, and connect. Today, Meta is leaning hard into AI, augmented reality, and its long-term metaverse ambitions, positioning itself as infrastructure for the next wave of digital interaction.

That long-term vision has made Meta one of Wall Street's biggest success stories. The stock has surged 440% over the past decade, helping the company grow into a tech giant with a market capitalization of $1.7 trillion and cementing its place among the "Magnificent Seven."

However, the ride has not been entirely smooth. Over the past 52 weeks, META stock has slipped 7.7% and remains 17% below its all-time high of $796.25. Much of that weakness stemmed from familiar investor concerns, including uncertainty around advertising demand, soaring AI-related capital spending, and questions about when those massive investments would begin generating meaningful returns.

However, sentiment has shifted noticeably in recent weeks. Meta stock has recently regained momentum as investors have started viewing its massive AI spending as a long-term growth driver rather than a near-term cost burden. Confidence has been boosted by the rollout of its custom Iris AI chip, expanding gigawatt-scale data center plans, and the launch of the competitively priced Muse Spark 1.1 model. Together, these initiatives could lower computing costs, create new AI revenue opportunities, and strengthen Meta's position in the fast-growing AI market, improving investor sentiment toward the stock. Over the past five days alone, META stock is up 10.35%.

From a technical standpoint, momentum also appears steady. The 14-day RSI sits at 64.36, approaching, but not yet deep into, overbought territory, while the MACD oscillator signals bullishness with positive histogram bars, suggesting buyers continue to hold the upper hand and the recent upward momentum could have further room to run.

Valuation-wise, Meta may appear expensive, trading at 21.44 times forward price-to-earnings and 6.72 times forward sales, both above sector averages. However, the stock remains below its own historical valuation levels for its forward P/E. Given Meta's expanding AI ambitions and strong earnings growth potential, that premium looks increasingly justified and could become more attractive as future growth catches up. Plus, Meta has been rewarding shareholders through dividends.

In the first quarter of fiscal 2026, reported on April 29, Meta's revenue climbed 33.1% year-over-year (YOY) to $56.3 billion, comfortably beating Wall Street's expectations. Profit growth was even more impressive, with EPS surging 62.4% annually to $10.44, well ahead of analysts' estimates.

The company's massive user base continued to grow. Family daily active people – which includes users across Facebook, Instagram, WhatsApp, and Messenger – reached 3.56 billion in March, up 4% YOY. Management noted that a slight sequential decline was largely due to internet disruptions in Iran and restrictions on WhatsApp access in Russia.

Meta's advertising engine also remained remarkably healthy. Ad impressions across its family of apps increased 19% YOY, while the average price per ad rose 12%, highlighting strong advertiser demand. Meanwhile, headcount, as of March 31, edged up just 1% annually to 77,986, reflecting disciplined hiring despite the company's aggressive AI expansion.

Still, investors initially focused on spending. Meta lifted its 2026 capital expenditure guidance to $125 billion to $145 billion, largely to fund its AI infrastructure buildout, triggering an 8.55% drop in the stock after earnings despite the strong quarterly results.

Meta is scheduled to report its second-quarter FY2026 results later this month. Management has guided revenue in the range of $58 billion to $61 billion.

Meanwhile, Wall Street expects Q2 EPS to come in at $7.09, reflecting a modest YOY decline. Looking further ahead, analysts project full-year FY2026 EPS of $29.46 before rebounding strongly to $35.18 in FY2027, representing 19.4% annual EPS growth.