Meta Platforms shares have climbed 36 percent this month, the strongest monthly gain since July 2013, pushing the company within striking distance of a $2 trillion valuation. The rally coincides with the release of Muse, a personal AI assistant that quickly topped app-store charts and eased fears that the company's massive AI spending would fail to generate returns.
The reversal
Six weeks ago the stock was down 18 percent for the year and ranked among the bottom 50 performers in the S&P 500 through mid-August. Since then it has added 43 percent, making it the third-best performer in the index. The turnaround began in late August when Meta agreed to pay as much as $18 billion to settle a social-media lawsuit, lifting a significant legal overhang.
AI excitement drives the move
But the dominant catalyst has been Muse. Investors have responded by selling shares across a range of sectors on disruption fears, echoing the selloffs triggered earlier this year by Anthropic. Meta has already announced commerce partnerships with Maplebear, which owns Instacart, and with Expedia. At a September 23 event the company showed a palm-sized device for accessing Muse and camera-free versions of its smart glasses, drawing positive analyst reviews. JPMorgan's Doug Anmuth upgraded the stock to overweight from neutral on September 10, citing early-stage potential beyond advertising.
The spending wall
Validation comes at a steep price. Capital expenditure is projected to reach nearly $140 billion this year, double the roughly $70 billion spent in 2025, and then climb to $197 billion in 2027 and $215 billion in 2028. Free cash flow, which was $46 billion last year, is expected to swing to negative $6.4 billion in 2026 and negative $29.2 billion in 2027. Analysts forecast revenue growth of 26 percent to $254 billion this year and net income growth of 33 percent to $80.6 billion, though both are seen decelerating sharply in 2027 to 20 percent and 9 percent respectively.
Valuation context
The stock now trades at 21 times forward earnings, up from a June low below 14 times but roughly in line with its historical average multiple.