Is Meta Stock Still The Self-Funding Ad Business You Bought?

If you bought Meta Platforms (META) for its advertising engine, the engine still runs: revenue rose 28% year over year in the June 2026 quarter, and its Advantage+ automated campaigns keep growing. What has changed is where the cash goes afterward. The question for a holder is whether Meta is still the business you bought.

Where Does Meta’s Cash Go Now?

Over the twelve months through the June 2026 quarter, capital spending took 39.1% of revenue, against 18.5% across Meta’s history. That money buys servers, data centers and network infrastructure. In late July 2026, Meta also announced a venture with BlackRock to develop a 1 gigawatt data center in El Paso, Texas. The plan is to keep going: management narrowed its 2026 capital-spending range by lifting the bottom of it.

Less cash is left over. TTM free-cash-flow margin is 18.0%, against 32.8% across its history, so on each dollar of sales Meta keeps a little more than half the free cash it used to.

Borrowing fills part of the gap. Debt has risen to 25.0% of total assets, against a historical 7.0%, and the CFO says Meta is adding more debt to lower its cost of capital. Meta still holds more cash and marketable securities than debt.

Together, those three readings are the most unusual combination Meta has shown in 14 years. Taken with the 2026 spending floor that management has raised, the combination reads as a change in the business rather than one quarter of noise.

What Does Meta Say The Spending Will Earn?

Management says it has more profitable uses for compute than it has compute. A large share goes to training models at Meta Superintelligence Labs, a lab little more than a year old. Part of the rest goes to ad ranking in the core apps, to business agents already used each week by more than 1 million businesses on WhatsApp and Messenger, and to personal agents the CEO calls the next wave of products, which he said in late July 2026 had not shipped yet.

Outside buyers are offering a large premium over what Meta paid for the compute, the CEO says, and Meta would rather sell the intelligence built on it than the compute itself. The catch: data centers built now come online later and earn nothing until they do. Meta has given no figure for 2027 capital spending.

What Has Meta’s Share Price Already Done?

The stock has lost 11.6% over the past twelve months, 26.7 percentage points behind the market. Over the past three months, though, it has beaten the market by 15.0 points. Whether the shares fell because of the higher capital spending, the price cannot say.

If you own Meta for the ad business alone, you now also own a builder of compute that borrows to build and earns on it later. Re-underwriting means scoring it again on growth, profitability, stability, resilience and valuation. The figure that settles the new terms is the 2027 capital-spending outlook, when management gives one. Until then, watch whether free-cash-flow margin climbs back toward 32.8% or stays near 18.0%. Meta has raised the floor on its capital spending. The comparison worth making is which companies are raising their guidance right now.

So Do You Keep Holding Meta Through The Build?

Perhaps, if you want the builder as well as the ad business, and if you can wait for the data centers to earn. That is a call on one company’s plan, made before its return shows up, and the Trefis High Quality Portfolio spreads that kind of call across many businesses rather than resting it on one. That portfolio has a track record of outpacing the three major indices.