Meta Platforms Inc. (NASDAQ:META) shares are trading lower Friday morning following reports of internal setbacks. The company's upcoming foundational AI model, code-named “Avocado,” is reportedly underperforming against key industry rivals.

• Meta Platforms stock is taking a breather. What’s the outlook for META shares?

Avocado Underwhelms in Internal Evaluations

Internal tests show “Avocado” is lagging behind newer models from Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Anthropic. The New York Times reported these findings on Friday, citing people familiar with the matter. While the model surpassed earlier versions of Google's Gemini, it failed to match the capabilities of the latest Gemini release.

Launch Delayed Amid Licensing Talks

Due to the performance gap, Meta pushed the launch back to at least May. The model was originally scheduled for a March release.

Zuckerberg's $135 Billion Infrastructure Bet

CEO Mark Zuckerberg is pivoting heavily toward AI infrastructure. Meta projected that 2026 capital expenditure could reach $135 billion. This massive spend aims to build gigawatt-scale data centers for next-generation AI.

However, famed investor Michael Burry warned that tech giants are abruptly abandoning share repurchases to fund these costs.

Technical Analysis

Meta is trading 3.4% below its 20-day Simple Moving Average (SMA) and 4.4% below its 100-day SMA, keeping the near-to-intermediate trend pointed down.

Shares are up 4.96% over the past 12 months and are located between its 52-week low and high.

• Key Resistance: $673
• Key Support: $600

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the April 29 (estimated) earnings report.

• EPS Estimate: $6.63 (Up from $6.43 year-over-year)
• Revenue Estimate: $55.40 Billion (Up from $42.31 Billion YoY)
• Valuation: P/E of 27.2x (Indicates premium valuation relative to peers)

The stock carries a Buy Rating with an average price forecast of $851.86. Recent analyst moves include:

• Wells Fargo: Overweight (Raises Target to $856 on Feb. 23)
• Argus Research: Buy (Maintains Target to $800 on Feb. 2)
• DA Davidson: Buy (Raises Target to $850 on Jan. 29)

META Stock Price Activity: Meta Platforms shares were down 5.86% at $624.73 at publication on Friday, according to Benzinga Pro data.

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