Meta Platforms’ share price has fallen by approximately 10% over the past week, erasing all gains recorded following its Q4 earnings release. This sell-off follows a period in which investor optimism had driven the stock higher on the back of robust revenue growth and aggressive AI spending plans. The correction brings the stock’s forward P/E multiple down to around 28, a level last seen during market-wide tech pullbacks earlier this year.

In its Q4 results, Meta reported year-over-year revenue growth of 24%, driven by continued strength in ad sales across Facebook, Instagram and Reels. Total quarterly revenue approached $60 billion, topping consensus estimates by a notable margin. Management then set a Q1 revenue growth target of 30% year-over-year, implying further acceleration in advertising demand and higher monetization of short-form video content.

Meta’s heavy investment in artificial intelligence infrastructure has weighed on operating margins for two consecutive quarters. Capital expenditures related to data-center build-out and AI compute capacity exceeded $14 billion in Q4, contributing to a modest decline in adjusted operating margin to the low-30% range. CFO commentary highlighted that this capex cycle is expected to peak throughout calendar 2026 before tapering off in subsequent years.

Analysts remain divided on Meta’s risk-reward profile. Several firms have maintained Buy or Outperform ratings, citing the company’s dominant social-media ecosystem and long-term AI thesis. However, caution flags include execution risk around new AI products, potential regulatory scrutiny of content algorithms and the high bar set by current valuation levels. Long-term investors may view the recent pullback as an attractive entry point, provided they are comfortable with short-term volatility tied to capex intensity and competitive pressures.