Meta Platforms is in the midst of a major capital‐expenditure supercycle, investing heavily in data centers and AI infrastructure to support its suite of social media services. Management reports that every dollar spent on R&D and server capacity is translating directly into higher average revenue per user (ARPU), driven by improved algorithms and expanded AI capabilities across Facebook, Instagram and WhatsApp. This operating leverage is expected to accelerate profitability as fixed costs are spread over a rapidly growing user base, with the company forecasting that incremental revenues will flow almost entirely to the bottom line over the next two years.

In its most recent quarterly report, Meta Platforms delivered revenue of $51.2 billion, a 26% year-on-year increase, and adjusted earnings per share of $7.25, up 20%. Daily active user counts across its apps exceeded 3.5 billion, and engagement metrics climbed—time spent on Facebook rose 5% and on Threads 10%—underscoring the impact of its LLaMA open-source AI models on content relevance. The company also achieved a 10% increase in price per ad, as advertisers paid premiums for AI-powered targeting, reinforcing the view that Meta’s investments in AI are directly monetizable.

With its share price above $600 and having never split since its 2012 IPO, Meta is widely viewed as the top candidate for a 2026 stock split. Over the past decade, revenue has surged 852% and adjusted net income by 959%, driving the stock up 535%. Yet at under 28 times forward earnings, Meta trades below the S&P 500 average of 31x and at the lowest multiple among its 'Magnificent Seven' peers. Historical data show companies that announce splits often outperform the market by double digits in the following 12 months, suggesting a split could catalyze further gains while lowering the retail entry price for new investors.