TLDR
- Ofcom investigating Meta over potentially inaccurate WhatsApp information from SMS market review
- Probe examines data submitted during wholesale business bulk SMS market analysis last year
- HSBC keeps Buy rating with $905 target as Meta trades at $647.63
- Meta expects $39.4 billion capital expenditure growth in 2026
- Company shows 82% gross profit margins and 21% revenue growth
UK telecommunications regulator Ofcom is investigating Meta Platforms over concerns about information the company provided regarding WhatsApp. The probe marks a regulatory challenge for the social media giant as it pushes deeper into AI investments.
Ofcom’s investigation centers on Meta’s submissions during a wholesale market review for business bulk SMS messages. These messages handle appointment reminders, delivery notifications, and other business communications.
The regulator stated that available evidence suggests Meta’s responses may not have been complete and accurate. Ofcom conducted the SMS market review throughout last year.
Meta stock currently trades at $647.63. Analyst price targets range from $685 to $1,117.
Analysts Maintain Bullish Outlook
HSBC reiterated its Buy rating on Meta with a $905 price target this week. The investment bank credits Meta’s early AI model involvement and substantial technology investments.
AI technology already supports Meta’s advertising business effectively. The systems drive higher platform usage and increase available ad space.
Meta’s financial metrics look strong. The company posts 82.01% gross profit margins and 21.27% revenue growth over the last twelve months. The stock trades at a P/E ratio of 28.56.
HSBC notes Meta isn’t best positioned in Generative AI traffic compared to OpenAI, Gemini, Deepseek, or Claude. But Meta’s focus has been leveraging AI for its core advertising business rather than chasing pure AI traffic numbers.
Spending Plans Accelerate
Meta has outlined major capital expenditure increases for 2026. The company expects capital spending growth will exceed the $32 billion increase projected for fiscal year 2025.
Market consensus anticipates approximately $39.4 billion in capital expenditure growth for 2026. These investments target infrastructure and technology development for AI capabilities.
Total expenses will climb at a faster rate too. Meta guided that total expenses will grow at a faster percentage rate in 2026 than in 2025.
Consensus expectations show 23% expense growth in 2025 and 28% growth in 2026. These figures reflect Meta’s aggressive AI development strategy.
Investigation Details
Ofcom has not disclosed specific details about which information may have been incomplete or inaccurate. The regulator based its investigation launch on evidence gathered during last year’s market review process.
The wholesale business bulk SMS market represents a specific telecommunications segment. Companies rely on these services for customer communications across various industries.
Ofcom’s statement confirmed the investigation focuses on information received from Meta in response to the SMS market review. The regulator is examining whether Meta’s submissions met accuracy and completeness standards.
Meta’s valuation appears in line with fair value assessments. The company continues investing heavily in AI infrastructure while maintaining strong profit margins and revenue growth.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
