Meta Platforms (META) Increased Its Capex Estimation in 2026. Here’s Why

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Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q3 2025, the fund gained 5.7% (Institutional Shares) compared to the Russell 1000 Growth Index’s (R1KG) 10.5% gain and the S&P 500 Index’s (SPX) 8.1% return. The fund is up 14.4% YTD compared to 17.2% and 14.8% for the indexes. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Baron Fifth Avenue Growth Fund highlighted stocks such as Meta Platforms, Inc. (NASDAQ:META). Meta Platforms, Inc. (NASDAQ:META) is a technology company that develops products to connect people. The one-month return of Meta Platforms, Inc. (NASDAQ:META) was 2.16%, and its shares gained 4.44% of their value over the last 52 weeks. On December 01, 2025, Meta Platforms, Inc. (NASDAQ:META) stock closed at $640.87 per share, with a market capitalization of $1.615 billion.

Baron Fifth Avenue Growth Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its third quarter 2025 investor letter:

"In addition to this trip, the quarterly earnings reporting season offered a flurry of data points supporting the significant opportunity behind AI in terms of both productivity enhancements and incremental revenues: • Meta Platforms, Inc. (NASDAQ:META) reported quarterly revenue growth of 22% and highlighted AI as a tailwind to engagement and to advertiser's return on ad spend, prompting the company to increase 2026 estimated capex expectations to $100 billion, $30 billion higher than Wall Street expectations. We thought Mark Zuckerberg’s comments regarding “Early glimpses of AI improving itself” were particularly insightful.8 If AI can improve itself, a self-reinforcing flywheel can emerge resulting in super-intelligence."

Meta Platforms, Inc. (NASDAQ:META) is in the third position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 273 hedge fund portfolios held Meta Platforms, Inc. (NASDAQ:META) at the end of the third quarter, which was 260 in the previous quarter.  In the third quarter of 2025, Meta Platforms, Inc. (NASDAQ:META) reported revenue of $51.2 billion, representing a 26% or 25% constant currency. While we acknowledge the potential of Meta Platforms, Inc. (NASDAQ:META) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Meta Platforms, Inc. (NASDAQ:META) and shared the list of buzzing AI stocks on Wall Street. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.