Meta Platforms stock fell 2% to around $594 on Friday, extending its recent weakness even as the company made a significant move in the artificial intelligence infrastructure space. The stock has now declined roughly 5% over the past 30 days, reflecting short-term pressure despite strong long-term growth expectations.
The decline comes as Meta officially joined the Optical Compute Interconnect (OCI) group alongside major technology players including Nvidia, Microsoft, AMD, Broadcom and OpenAI. The initiative focuses on building open, high-performance optical interconnects designed for next-generation AI data centers.
Meta joins key AI infrastructure alliance
The OCI group aims to create an open, multi-vendor standard for optical connectivity, which is critical for scaling large AI clusters efficiently. As AI workloads become more complex, traditional electrical interconnects face limitations in speed, latency and power consumption. Optical links are seen as the next step in solving these challenges.
By joining OCI, Meta is positioning itself not just as an AI application leader, but as an active contributor to the underlying infrastructure that powers AI systems. This move places Meta alongside some of the most influential companies shaping the future of AI hardware and networking.
Importantly, the open standard approach means Meta will have greater flexibility in working with multiple chip and networking suppliers. This could reduce long-term dependency on any single vendor and potentially optimize costs across its expanding AI data center footprint.
Why this move matters for investors
Meta has already been aggressively investing in AI infrastructure to support its core businesses, including advertising, recommendation systems and generative AI initiatives. Joining OCI adds another strategic layer, allowing the company to influence how future AI systems are built and interconnected.
For investors, this signals that Meta is thinking beyond software and models and focusing on the entire AI stack. Infrastructure efficiency will play a crucial role in determining long-term profitability, especially as capital expenditure on AI continues to rise across the industry.
However, the open ecosystem also comes with trade-offs. While it improves flexibility, it may limit Meta’s ability to create highly differentiated proprietary hardware advantages. It also increases reliance on a relatively small group of key suppliers such as Nvidia and AMD.
Stock performance and valuation snapshot
Despite the latest decline, Meta’s longer-term performance remains strong. The stock has gained approximately 3.9% over the past year and delivered significantly higher returns over a three-year period. However, recent momentum has turned negative, with a 30-day decline of around 5.1% highlighting short-term investor caution.
From a valuation perspective, Meta still appears attractive based on multiple metrics. The current share price near $594–$606 sits about 30% below the average analyst target of $863.63. Additionally, some valuation models suggest the stock is trading nearly 46% below its estimated fair value, reinforcing the argument that Meta may be undervalued despite its strong rally in recent years.
At the same time, broader valuation indicators such as style scoring frameworks place Meta roughly in line with peers, suggesting that while it is not deeply discounted across all metrics, it still offers a compelling risk-reward balance given its growth trajectory.
Earnings and growth outlook remains strong
Meta’s financial outlook continues to support its long-term investment case. For the current quarter, earnings are expected to reach $6.67 per share, representing a 3.7% increase year over year. Full-year earnings are projected to grow by approximately 26.7%, followed by an additional 14.9% increase next year.
Revenue growth is also expected to remain robust. Analysts estimate quarterly revenue of $55.34 billion, up 30.8% year over year. Annual revenue is projected to reach $249.25 billion this year and $295.18 billion next year, reflecting growth rates of 24% and 18.4%, respectively.
Meta has also demonstrated consistent execution, beating both revenue and earnings expectations in each of the last four quarters. In its most recent results, the company reported revenue of $59.89 billion, up 23.8% year over year, along with earnings per share of $8.88, exceeding consensus estimates.
Why the stock is falling despite strong fundamentals
The recent decline in Meta’s stock is largely tied to short-term sentiment rather than a deterioration in fundamentals. Investors are increasingly focused on the scale of AI-related capital expenditure and its potential impact on margins.
Building and maintaining AI infrastructure is capital intensive, and while these investments are expected to drive long-term growth, they may pressure profitability in the near term. This dynamic is affecting not just Meta but the broader group of AI-focused technology stocks.
Additionally, the market is waiting for clearer signs of monetization from AI initiatives. While Meta is integrating AI across its platforms, including advertising and content recommendations, investors want to see tangible revenue acceleration directly linked to these investments.
Key risks and considerations
While Meta’s OCI participation strengthens its strategic positioning, there are several factors investors should monitor closely. The open, multi-vendor approach could reduce differentiation in hardware capabilities. There is also ongoing reliance on a limited number of key suppliers for chips and networking components.
Another important factor is capital allocation. Investors will be watching how Meta balances spending between in-house development and external partnerships, as well as how efficiently it converts these investments into revenue growth.
Long-term outlook
Meta’s entry into the OCI group reinforces its commitment to playing a central role in the AI ecosystem. The company is no longer just a platform provider but is actively shaping the infrastructure layer that will support future AI applications.
While the stock’s short-term movement reflects caution, the broader picture remains intact. Strong earnings growth, robust revenue expansion and a potentially undervalued stock price continue to support the long-term case.
Investors looking to track Meta’s ongoing developments can follow updates through Meta Investor Relations and monitor broader AI infrastructure trends via industry groups such as the Ethernet Alliance.
For now, Meta’s 2% fall to $594 appears to be a pause in momentum rather than a shift in direction. The company’s deeper push into AI infrastructure could play a defining role in its next phase of growth, making it one of the most closely watched stocks in the evolving AI landscape.
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