Meta’s Strategic Edge in the AI Energy Race

While Meta's stock has declined approximately 8% over the past quarter, a significant shift is occurring beneath the surface. Major institutional investors are capitalizing on this period of weakness to increase their holdings. As the broader market focuses on the company's substantial investment expenditures, Meta is leveraging a distinct energy strategy to fortify its competitive position. This approach may provide a crucial advantage that rivals, including OpenAI, currently lack.

This strategic positioning appears to be bolstering confidence among large-scale investors. Despite the share price retreat to $658.79, major funds are expanding their stakes. In the third quarter, Los Angeles Capital Management increased its position by 3.3%, building a holding valued at over $1.1 billion. Heavyweights like Vanguard and BlackRock continue to maintain their substantial investments.

Valuation metrics help explain this sustained interest. With a current price-to-earnings (P/E) ratio of 28.4, the equity trades at a premium to the broader sector average. However, it remains notably cheaper than its direct peer group average of 34.9 and sits below estimated fair value. Market observers view this discrepancy as an attractive entry point.

The "Power Gating" Advantage

At the core of Meta's strategy is the concept of "power gating." Global electricity demand for data centers is surging, creating capacity constraints and placing immense pressure on tech giants to manage their energy consumption effectively.

Should investors sell immediately? Or is it worth buying Meta?

Meta has cultivated a level of strategic flexibility that many competitors cannot match. The corporation possesses the ability to throttle infrastructure spending and precisely control its power usage without compromising its ambitious artificial intelligence objectives. This capability not only reduces operational costs but also extends the lifespan of expensive hardware components. While other industry players feel compelled to continue relentless spending on massive expansion, Meta can scale its operations with greater efficiency.

AI Integration and Strategic Acquisitions

Fundamentally, Meta's business continues to be propelled by the deep integration of artificial intelligence. Its algorithms enhance ad targeting and keep the platform's 3.54 billion daily users engaged for longer periods. This dynamic recently contributed to a revenue surge exceeding 26% in Q3.

To secure this lead, the company is investing aggressively. Its recent $2 billion acquisition of the startup Manus underscores this commitment. Founded by Chinese developers, the startup specializes in autonomous AI systems. Although the deal has attracted regulatory scrutiny due to the founders' origins, it is widely regarded as a significant technological step toward "Agentic AI"—systems capable of independent action.

Market Outlook and Key Catalysts

Analyst sentiment remains positive despite the recent share price dip. The average price target of approximately $829 suggests an upside potential of around 26%. The future trajectory of the stock will now hinge on Meta's efficiency in monetizing its new AI models and whether planned product launches in the first half of 2026 deliver the anticipated market impact.