The Truth About Meta’s AI 🤫

Remember when software made business simpler?

Today, the average company runs 100+ apps—each with its own logins, data, and headaches. HR can’t find employee info. IT fights security blind spots. Finance reconciles numbers instead of planning growth.

Our State of Software Sprawl report reveals the true cost of “Software as a Disservice” (SaaD)—and how much time, money, and sanity it’s draining from your teams.

Read the full report and see how your company stacks up→

The future of work is unified. Don’t get SaaD. Get Rippling.

Stop SaaD in its tracks

Meta $META ( ▲ 0.87% ) is out here flexing its AI muscles — but the wallet? Still in the pocket.

While Microsoft, Amazon, and Google are selling AI like it’s bottled lightning, Meta’s approach is more like: “Yeah, we built the lightning... but we’re giving it away for free.”

Their open-source LLaMA model is everywhere, their compute clusters are massive, and their AI powers everything from ad targeting to keeping you doomscrolling through reels at 2 a.m.

But here’s the twist. Unlike its hyperscaler buddies, Meta’s AI isn’t a product. It’s a tool to squeeze more juice out of its core ad business. That means AI makes Meta’s ads smarter — not Meta’s bank account fatter (at least, not directly).

So while Microsoft’s AI spend builds Azure goldmines and Amazon’s turns into AWS cash cows, Meta’s CapEx party is riskier. There’s no clear payback other than, “Hey, ads are doing better!”

Let’s not get it twisted. Meta’s ad empire is still dominant.

Sales jumped 50% to $51.2 billion, proving Zuck still knows how to keep eyeballs glued. The “Family of Apps” — Facebook, Instagram, WhatsApp, Messenger — now has 3.54 billion logged-in users, up 12% year-on-year.

That’s nearly half the planet watching your aunt’s vacation photos and your ex’s engagement post.

Margins? Still hovering between 49% and 60%. Respectable. But the story here isn’t about growth — it’s about balance. The core ad biz keeps Meta rich, while everything else is basically a science fair project.

Take Reality Labs — Meta’s metaverse money pit. It brought in less than 1% of total sales and burned a $4.4 billion hole in Q3. Luckily, the ad division’s $25 billion operating income patched that up like duct tape on a Ferrari.

Meta’s biggest enemy? Not TikTok. It’s regulation and reckless spending.

In Europe, the Digital Markets Act is already breathing down its neck. Meanwhile, Australia just said “no social media for kids under 16,” and countries like Norway, France, Denmark, Indonesia, and Brazil are lining up to do the same.

That’s a double hit. Higher compliance costs and fewer future users.

Now, about that spending spree… Meta has doubled CapEx to $50 billion this year, mostly to fuel AI. But here’s the problem. Unlike Amazon or Microsoft, there’s no strong revenue engine behind those AI investments.

They’re dropping billions on infrastructure with no clear way to cash in.

If Meta ever figures out how to monetize LLaMA — say, with a subscription or enterprise licensing — that’s a potential goldmine.

There’s also virtual reality, but right now, that division bleeds more cash than a crypto trader in 2022. Profitability isn’t even in the same galaxy yet.

Until then, Meta’s identity crisis continues: it’s not an AI company, not a cloud company. Just a hyper-efficient ad company with a tech crush on AI.

Alright, let’s talk numbers.

If we track EBITDA, cash flow, and balance sheets, Meta gets a $904.52 price target — that’s 42% upside from here. The average target on Wall Street is over 35% for the next 12 months.

Why? Because even if Meta’s business model is as one-dimensional as your friend who only talks about crypto, it’s still absurdly dominant.

EBITDA is projected to grow 18% annually, even as free cash flow drops 11% annually due to that CapEx binge.

If you’re chasing free cash flow growth, Meta ain’t your stock. But if you’re chasing value with a strong balance sheet and endless ad dominance… you might want to buckle in.

Thing is, spending 60–80% of your operating cash flow on CapEx is fine if you’re building a cloud empire. But Meta’s building a better algorithm to show you sneakers after you say “I need new shoes” out loud.

Until Meta finds a way to sell its AI instead of using it, those CapEx dollars aren’t compounding — they’re just fueling engagement.

Americans’ credit card debt has surpassed $1.2 trillion, and high interest rates are making it harder to catch up (yes, even if you’re making your payments). If you’re in the same boat as millions of Americans, debt relief companies could help by negotiating directly with creditors to reduce what you owe by up to 60%. Check out Money’s list of the best debt relief programs, answer a few short questions, and get your free rate today.

Get your free rate