Analyst says buy the dip in this big cap tech stock (it's not Nvidia)

• StockStory Top Pick META -0.41% NVDA +1.37%
• ^GSPC +0.69%

The market has been rotating for weeks as former high-flying AI stocks have underperformed out-of-favor baskets. As a result, many of the biggest stocks in the S&P 500 have fallen sharply, including Mark Zuckerberg's Meta Platforms.

Meta Platforms — one of the magnificent seven stocks — is best known by the names of its social media platforms, Facebook and Instagram. It's also the parent company of the popular WhatsApp and the less-popular, yet always intriguing, Reality Labs, which sells consumer electronics hardware, such as virtual reality glasses made in collaboration with Ray-Ban.

The company is truly massive, and Zuckerberg has never shied away from spending to make sure that its businesses remain front and center in the minds of consumers. Unsurprisingly, this has included a massive bet on artificial intelligence, including the development of its large language model, or AI chatbot, Llama.

"I am very focused on establishing Meta as the leading frontier AI lab. Building personal superintelligence for everyone and delivering the app experiences and computing devices that will improve the lives of billions of people around the world," said Zuckerberg on Meta's third-quarter earnings call. "We're heads down developing our next generation of models and products."

Zuckerberg's spending has drawn criticism in the past, mostly due to outsized spending on Reality Labs metaverse products. However, shareholders have cheered its ever-increasing investments in AI... until recently.

After Meta Platforms announced it would significantly bump up spending plans during its conference call in October, shareholders hit the exits, sending shares reeling. The company's stock price fell 11% the day after its earnings call and continued to slide, resulting in a 27% decline from its August peak to its recent mid-November lows.

Long-time analyst Bob Lang, a market veteran who's navigated Wall Street since before the Great Financial Crisis, thinks Meta Platforms' shares have fallen enough to make them "buy the dip" worthy.

Meta bets big on AI wave

Meta Platforms is investing hundreds of billions of dollars (yes, billions) in artificial intelligence infrastructure that can power AI chatbots and agentic AI applications. The big bet puts it in a select group of the world's biggest hyperscalers and AI app developers, including Amazon, Microsoft, Alphabet, and OpenAI (the company behind ChatGPT).

In 2024, Mark Zuckerberg authorized Meta's capital expenditures of $39.2 billion. That figure has swelled to $70 billion to $72 billion in 2025, according to management, with "notably larger" spending on tap in 2026. The company's capex was over $19 billion in the third quarter alone.

The spending is part of a compute power grab to front-load as much AI infrastructure as possible. This means racks upon racks of servers powered by high-powered AI chips made by Nvidia, connected by the fastest networking equipment.

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The move is expected to help Meta:

• Improve ad targeting and performance: AI apps are expected to improve ad personalization and delivery, increasing revenue.

• Power recommendation systems: AI can drive content recommendation algorithms for Reels and feeds, boosting user engagement and time spent on Facebook and Instagram.

• Help monetize messaging: Meta views AI is key to offering new features within messaging platforms like WhatsApp and Messenger.

Meta argues that it's already seeing benefits, with the annual run rate for AI-powered ad tools already eclipsing $60 billion.

Analyst says Meta Platforms' drop is a buy opportunity

Lang is a professional analyst and options trader who has managed money through plenty of stock market pops and drops, including the Internet boom and bust, the Great Recession, Covid, and 2022's inflation-driven bear market.

In a post on TheStreet Pro, Lang explained why the stock's recent price action suggests that the worst may be behind Meta Platforms:

As evidence of the sell-off having played out, Lang points to a number of signals used by market technicians, who track price action over time for clues as to what may happen next.

"Notice the strong buy signal coming from the Moving Average Convergence Divergence," wrote Lang. "This is one of the most reliable signals in the technical universe.

He also says that "Parabolic stop and reverse has just flipped to a buy signal, so there is some support at the recent lows," and "Money flow is negative but improving."

The combination suggests that Meta Platforms' next move is higher, not lower, making it a strong dip-buying candidate.

"We like Meta Platforms in TheStreet Pro Portfolio and rate it a one, buy at any time."

Wall Street weighs in on Meta Platforms

While investors sold Meta Platforms shares after the company's third-quarter earnings call, there was still plenty to like in the report.

Revenue was $51.24 billion, up 26% year over year, and $1.83 billion better than Wall Street expected. Backing out one-time items, including a $16 billion charge taken due to the One Big Beautiful Bill Act, earnings per share were $7.25.

The company's results were driven by:

• Family daily active people (DAP): 3.54 billion for September 2025, up 8% year over year.

• Ad impressions: Up 14% year over year.

• Average price per ad: Up 10% year over year. Source: Meta Platforms

The company's business continued to grow, and it remained nicely profitable,` despite increasing its AI spending.

Still, Goldman Sachs revamped its Meta stock price target, reducing it to $815 per share from $870 after Meta's earnings. However, it left its "buy" rating on the stock, citing multiple drivers that could pay off for investors.

"Over the long term, we continue to see META mgmt. focused squarely on the core building blocks of growth around operating themes (with the framework having been put in place over the last ~6-12 months) at the intersection of AI and spatial computing across the existing Family of Apps, new standalone apps, and the hardware/software/platform potential around Reality Labs," wrote Goldman Sachs analysts in a note shared with TheStreet.

Related: Legendary billionaire Ken Griffin's Citadel makes huge bet on major tech stock

This story was originally published by TheStreet on Nov 26, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.