Meta Platforms Demonstrates Cost Discipline Amid Aggressive AI Spending

3 days ago

Parkev Tatevosian, CFA

"But with Meta Platforms, the company generates so much free cash flow, right? $49 billion in free cash flow it generated in 2024 and it's estimated to generate 57 billion in free cash flow here in 2025 even after all of that aggressive spending. So I like to point this out for investors to keep this in perspective that for many years the risk with these companies was that they were generating all this cash and they didn't know what to do with it. But now with artificial intelligence, they found that category they can invest and they expect to get a good return on that investment. In fact, I expect Meta's free cash flow to rise from 57 billion all the way up to 151 billion by 2035 or roughly triple between now and then over the decade."

The speaker highlights Meta Platforms' ability to generate robust free cash flow despite its aggressive $65 billion capital expenditures on AI expansion. He underscores the discipline in cost management by noting that even with cutting 600 AI jobs, the company remains well-positioned to invest in AI initiatives. The expectation is a significant rise in free cash flow by 2035, reinforcing the company’s efficient capital allocation strategy.

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