Meta: The market is afraid of expensive AI. I see a company that could dominate the next era of the internet $META

When it comes to Meta today, many investors are mainly focused on one thing:

Huge AI spending.

And honestly, it’s not surprising. Meta expects its capital expenditures in 2026 to be roughly 125 to 145 billion USD. That’s a staggering number and the market naturally asks whether Mark Zuckerberg is once again burning too much money on a vision that might not pay off.

But in my view, you can look at this completely differently.

What if Meta isn’t burning money, but buying the next decade of the internet?

Meta is more than just Facebook and Instagram

Many people still think of Meta as the company that owns Facebook and Instagram and makes money from ads.

That is true, but to me it’s an incomplete picture.

Today Meta is building something bigger:

An AI layer across its entire ecosystem.

Better content recommendations. Better ads. AI tools for businesses. WhatsApp business agents. Reels. Threads. Proprietary AI models. And perhaps the most intriguing — smart glasses.

This isn’t a single AI product.

This is AI embedded into apps that billions of people use every day.

And that’s why Jensen Huang from Nvidia’s remark that “nobody uses AI better than Meta” makes a lot of sense to me. Investors worry too much about capex and overlook how AI is improving Meta’s advertising business.

AI is already helping the core business

Meta’s biggest business is still advertising.

And AI is extremely powerful here.

Meta needs to know what content to show you, which ad to show you, at what time, in what format, and for what kind of behavior.

The better AI nails that, the longer you stay in the app. The longer you stay, the more ad inventory Meta has. The better ads perform, the more companies are willing to pay.

And this is no longer just theory.

In Q1 2026 Meta reported revenues of 56.31 billion USD, a year-over-year growth of 33%. Ad impressions grew by 19% and average ad prices rose by 12%.

So far it doesn’t look like AI is just an expensive toy.

It looks like AI is already improving the main engine that makes Meta money.

The biggest optionality? Glasses

To me this is the most underestimated part of the whole thesis.

Meta’s glasses are not interesting just because they have a camera.

They are interesting because they can be the first natural AI hardware.

Today, if you want to use AI, you have to pull out your phone, unlock it, open an app and type or speak something.

With glasses it’s different.

You look at something. You ask. You get an answer.

No phone. No friction. No taking a device out of your pocket.

Meta, together with Oakley, introduced the Oakley Meta HSTN as a new category of “Performance AI glasses.” The glasses include a built-in camera, open-ear speakers, IPX4 resistance, 3K video and the Meta AI assistant.

And that’s where the story, in my opinion, starts to get really interesting.

Imagine glasses that can help you with sports, travel, cooking, work, content creation, translation, navigation, or everyday questions during the day.

Not as a replacement for your phone tomorrow.

But as the first step toward shifting part of the interaction with technology from the hand directly to the eyes.

Content could be a huge driver

This is something many investors underestimate.

Meta doesn’t have to explain to people what to do with the glasses.

People already create Reels, Stories, TikToks, Shorts, vlogs, workouts, travel, food, cars, sports, everyday life.

Glasses just give them a new way to do it more naturally.

Hands free. A first-person view. A more authentic shot. Less posing. More moment.

This is exactly the kind of product that can start as a “cool gadget” and over time become an everyday part of life.

Like smartwatches.

At first many people didn’t get them. Now millions wear them daily.

The valuation doesn’t look crazy

And now comes the most interesting part.

Meta is not a cheap small company.

But looking at valuation, I don’t think it’s more expensive than the market.

StockAnalysis lists Meta’s trailing P/E at about 21x, forward P/E at about 17.6x and PEG ratio around 0.84.

For comparison, the S&P 500 has a FactSet forward 12-month P/E of roughly 20.1x, meaning the index trades at a higher forward earnings multiple than Meta.

And that, to me, is a very interesting mismatch.

Meta trades cheaper than the S&P 500 despite, in my view, having much stronger AI optionality than the average company in the index.

Of course, the market discounts Meta for huge capex, Reality Labs losses and regulatory risks.

But if AI spending proves to improve ads, engagement, WhatsApp monetization and at the same time opens a new category of smart glasses, today’s valuation might not be expensive at all.

Risks shouldn’t be ignored

So this shouldn’t read like pure hype — the risks are real.

Meta is spending enormous amounts. Reality Labs still generates big losses. Smart glasses may fail to achieve mass adoption. Regulations and privacy could be an issue. And if AI investments don’t pay off, the market can punish the stock.

This is not a risk-free investment.

But investing is often not about whether a company has risks.

It’s about whether the potential reward makes sense relative to those risks.

And for me, that equation still makes sense with Meta.

Conclusion

Meta, in my view, is one of the most interesting AI companies on the market, even though many people still treat it as just Facebook and Instagram.

It’s not a chip company like Nvidia. It’s not a cloud giant like Microsoft. It’s not a pure AI startup.

But Meta has something few others do:

billions of users, a massive advertising engine, Instagram, WhatsApp, Messenger, Facebook, Threads, proprietary AI models, data, distribution, cash flow, and possibly a new hardware interface via glasses.

To me, Meta is a company that can turn AI into real money in a very practical way.

And maybe that’s why the market still doesn’t fully appreciate it.

Because while the market worries about how much Meta spends on AI, I ask a different question:

What if Meta is literally buying a spot in the next era of the internet?