Meta Platforms (META) Trims Equity Perks amid AI Expansion
Meta Platforms (META) has announced a reduction in stock awards for its employees, with annual equity grants being cut by approximately 10%. This decision will impact employees at various levels and locations within the company.
Shift towards AI Investment
This move by Meta comes as the company shifts its focus and investment towards Artificial Intelligence (AI), with billions of dollars being allocated to new projects and infrastructure development. In fact, Meta's stock has seen a significant increase of over 18% year-to-date and 48.87% over the past year, reaching a record high and outperforming many of its big tech competitors.
Meta's CEO, Mark Zuckerberg, has emphasized that AI is the top priority for the company, labeling 2025 as a "defining year" for AI advancements. Zuckerberg envisions Meta AI catering to more than 1 billion users in the near future. To support this vision, Meta plans to invest up to $65 billion in enhancing its AI capabilities, which includes substantial expansions of its data centers.
Workforce Changes and Industry Trends
Besides trimming equity perks, Meta is also implementing workforce changes by letting go of approximately 5% of its employees, totaling around 3,600 workers. This decision is based on performance evaluations as the company intensifies its focus on AI development. Similar trends are being observed in other tech giants such as Amazon (AMZN), Microsoft (MSFT), and Salesforce (CRM) who have also made job cuts in 2025 while increasing investments in AI technologies.
Despite Meta's efforts to reallocate funds from stock awards to bolster its AI infrastructure, its Llama AI model still lags behind competitors like ChatGPT. Recent advancements, such as China's DeepSeek model outperforming Llama, have led to a shake-up in the AI stocks market, prompting Zuckerberg to prioritize improvements in Llama's performance.
Wall Street Analysis and Stock Outlook
On Wall Street, analysts have assigned a Strong Buy consensus rating to META stock, with 44 Buy recommendations, three Holds, and one Sell issued in the past three months. Following a 49% increase in its share price over the last year, the average target price for META stands at $764.61 per share, indicating a potential upside of 10.04%.
In conclusion, Meta Platforms (META) continues to navigate changes in its equity perks and workforce while strategically positioning itself for growth in the AI sector amidst evolving industry dynamics.
