Meta’s $250 Billion Louisiana Bet Deepens the Analyst Split on AI Spending

Meta's Hyperion data center budget quintuples to $50B; total site investment past $250B. Q1 earnings beat, but capex surge & insider selling split analysts.

Meta Platforms has more than quintupled the budget for its Hyperion data center in Louisiana, pushing total projected investment at the site past $250 billion — a figure that underscores why Wall Street remains deeply divided over the stock. The facility, originally pegged at $10 billion, is now slated to cost over $50 billion and scale to 5 gigawatts of capacity, creating roughly 1,000 permanent jobs and 7,500 construction roles. A second AI data center, code-named Prometheus, is set to come online in 2026, while Hyperion will be phased in over several years.

The enormous capital outlay flows from Meta’s revised 2026 capex guidance of $125 billion to $145 billion, after the company spent $19 billion in the first quarter alone — a 47% year-over-year jump. Citigroup sees that figure climbing to $205 billion in 2027, and projects a combined $801 billion in capital spending across Meta, Alphabet and Amazon over that period, with all three likely to post negative free cash flow in both 2027 and 2028.

Against that backdrop, Wedbush has initiated coverage of Meta with a Neutral rating and a $671 price target — roughly 1% below the last close of $681.31 on the Nasdaq and well under the consensus average of $830.45. Analyst Ygal Arounian framed artificial intelligence as the “most influential swing factor” in the entire internet sector, yet placed Alphabet, Uber, Reddit and Xometry as top picks while leaving Meta on the sidelines. Peers are split: JPMorgan also rates it Neutral with a $725 target, Bernstein stands by Outperform and $850, and Weiss Ratings recently downgraded the stock to Hold.

Meta’s financial performance, however, gives the bulls ammunition. First-quarter 2026 earnings came in at $10.44 per share, crushing the consensus estimate of roughly $6.66 to $6.70. Revenue rose 33.1% to $56.31 billion, fueled by a 19% increase in ad impressions and a 12% jump in average price per ad. Daily active users across the family of apps reached 3.56 billion. Operating cash flow hit $32.2 billion, leaving free cash flow of $12.4 billion, and the balance sheet shows $23.4 billion in cash with no short-term debt.

The share price has reflected that strength. Meta rallied roughly 17% in July, adding about $250 billion in market value — the third-best monthly performance in the S&P 500 after a weak first half. The catalyst included reports that Meta is considering leasing excess data-center capacity to third parties, a potential cloud-computing pivot. Yet momentum has cooled: the stock closed at €585.70 on Thursday, down 1.26% on the day and 13.59% below its 52-week high of €677.80 from July 31, 2025. Over the trailing 30 days, it still shows a 13.24% gain.

Some observers point to insider selling as a cautionary signal. Over the past 90 days, executives including chief technology officer Andrew Bosworth, chief operating officer Olivan and chief financial officer Li sold a combined 39,503 shares worth $24.2 million. At the same time, Meta faces a lawsuit from 26 current and former employees who allege the company used AI-powered surveillance to target workers on medical or parental leave for layoffs. Separately, the European Commission is probing whether Meta violated the Digital Services Act regarding protections for minors.

Wedbush’s cautious stance puts Meta in the same “Neutral” bucket as DoorDash and Pinterest, citing limited upside potential. Alphabet, by contrast, received Wedbush’s highest conviction rating among mega-caps, with a $445 target implying roughly 20% upside. Retail investors on Stocktwits remain bullish for now, and the stock edged up 0.14% in early trading Thursday before slipping.

The next major test comes July 29, when Meta reports second-quarter results after the close, followed by a conference call at 4:30 p.m. Eastern. Analysts expect revenue growth of about 27% year over year. Investors will be listening closely for updates on the cloud strategy and whether Meta can show that its record spending on AI infrastructure is beginning to generate a measurable return — a question that currently splits the Street more than almost any other mega-cap tech name.