Meta Platforms Faces EU Investigation and Analyst Scrutiny on AI Spending

Menlo Park, California — On December 4, 2025, Meta Platforms, Inc. announced several significant developments impacting its stock and operations. The European Union (EU) has launched an antitrust investigation into the company’s new AI policy concerning WhatsApp, which is set to take effect in January 2026. This news comes during a time when Meta’s stock is trading at approximately $640 per share, reflecting a market capitalization of around $1.8 trillion.

Despite strong revenue growth in its advertising sector, Meta’s shares remain 20-25% below their all-time high of $796.25, reached in October 2025. This decline follows a post-earnings sell-off after the company revealed plans to boost its AI infrastructure spending significantly. Analysts are now carefully monitoring how these expenses will affect Meta’s future earnings.

In its Q3 2025 earnings report, Meta recorded a net income of $2.71 billion. However, this figure was skewed by a one-time tax charge of $15.93 billion due to new U.S. tax legislation. Analysts note that without this charge, the diluted earnings per share would have been approximately $7.25.

Management has signaled that capital expenditures will grow markedly in 2026, with estimates suggesting spending could exceed $100 billion, driven largely by increased costs associated with cloud infrastructure and AI talent. A report from The Motley Fool indicates that this escalated spending may change investors’ perceptions of Meta as a high-margin growth company.

Additionally, the EU investigation over Meta’s AI policies is raising concerns. Following the announcement, Meta’s stock dipped around 1.16%. This investigation indicates growing regulatory pressures tied to the company’s AI strategy. Analysts are concerned that these new regulations could hinder Meta’s rollout of innovative features in Europe.

Another major development for Meta is the recruitment of Alan Dye, Apple’s former head of human interface design, as the company’s new chief design officer, effective December 31, 2025. This strategic hire may enhance Meta’s ongoing partnership with EssilorLuxottica on smart glasses, aiming to improve user experience.

A recent analysis has underscored that Meta’s new AI capabilities, particularly its Segment Anything Model 3 (SAM 3), could pave the way for heightened performance in advertising technology. The optimism surrounding this model has led some analysts to predict upsides in stock performance over the next year.

Furthermore, on December 3, 2025, Meta’s board declared a quarterly cash dividend of $0.525 per share, marking its commitment to returning value to shareholders despite impending heavy capital expenditures.

As Meta navigates this complex landscape of regulatory scrutiny, increased spending, and evolving market sentiment, its financial trajectory remains under close watch by analysts and investors alike.