Meta Is About to Launch a Consumer-Facing AI Model, and OpenAI Is About to Have Its IPO, Making Now a Good Time to Buy Meta Stock

TradingKey - As of April 07, 2026, the stock price of Meta Platforms, Inc. (NASDAQ:META) is approximately $573. The second half of 2025 was a great period for this stock as it increased nearly 12%. However, in Q1 of 2026, Meta's stock dropped 13.5%, which was the largest decline since Q4 of 2022. This kind of decline usually impacts the investment perspective more than the operating perspective itself. The reality is that Meta has enough positive fundamentals to make the most recent decline appear more like an emotional correction rather than a breakdown in business.

What Meta Is Doing With Its Next AI Model

Axios broke news on 4/6/2026 that Meta plans to release Open Source versions of its next-generation AI models led by Alexandr Wang but maintain certain proprietary versions of some of its strongest models. This hybrid strategy indicates that Meta does not see one product launch as a way to end the race in AI; it has a strategy to develop a model portfolio that can expand across its consumer-facing platforms while still competing with the frontier labs. Open Source versions have the potential to attract developers and increase the number of users, while Proprietary versions have the potential to maintain differentiation where Meta feels their technology is superior.

Meta's approach to artificial intelligence (AI) development is very different than that of OpenAI. According to Reuters, OpenAI is consolidating ChatGPT, Codex, and its browser into one desktop “superapp.” Also, they are concentrating on developing tools that would enable developers to produce enterprise-level applications, all while scaling down from developing Sora, its existing coding tool. Essentially, OpenAI is transitioning into more of a controlled and consistent product ecosystem as opposed to Meta's increasing focus on offering existing AI products via their existing consumer technology platforms. Because Meta has a vast number of consumers using their platforms, they can quickly distribute new AI products to those users without requiring them to download entirely new stand-alone apps.

Why OpenAI’s IPO Matters, But Not as Much as Meta’s Cash Flow

OpenAI’s Initial Public Offering will impact the market mood. A story in Reuters early October 2025 indicated that OpenAI was reportedly contemplating an IPO within the second half of 2026, and in April of 2026 sources indicated both OpenAI and Anthropic - two major players in AI space - were considering making their companies publicly traded during this fiscal year. Currently OpenAI is still privately owned so there is not any publicly available financial data to base valuations on yet. Recently completed finance rounds resulted in a total of $122 billion, increasing OpenAI's overall enterprise value to $852 billion dollars, proving massive investor demand continues for leading-edge AI entities however OpenAI still exists as a pre-IPO, non-publicly traded company.

For stockholders of parent company Meta Platforms Inc., whether or not OpenAI ultimately goes public is far less important then looking at whether or not their increasing prominence creates more value in Meta’s expanding focus on Artificial Intelligence/AI platform development across their services. The answer would seem to be ‘yes’ given that competition gravitates toward multi distribution (greater number locations for potential sale) winners who have the largest potential saleable user base (end consumers) and/or the greatest opportunity to realize revenue from their customers – these same principles apply to both companies - Meta already has reported 3.58 billion daily active users through its ‘Family of Apps’ as of December 31,2025 thus giving Meta’s AI product a significant first mover advantage over any private AI company during the first day following completion of an IPO by OpenAI or any entity similar in nature.

Meta’s Financials Are Still Doing the Heavy Lifting

Meta’s results for 2025 were excellent by any measure. The company's 2025 revenue was $200.97 billion, a 22% increase from the prior year, operating income of $83.28 billion and free cash flow of $43.59 billion. The company ended 2025 with $81.59 billion in cash, cash equivalents and marketable securities. This information is important, as it shows that Meta’s AI buildout is being funded by real operational strength versus financial strain. Most AI stories continue to be about investment. Meta, however, is one of the few large investors in AI that is able to invest heavily and still remain highly profitable.

The company’s guidance for 2026 provides more context. Specifically, it anticipates spending between $115 billion and $135 billion on capital expenditures during 2026. The primary drivers for this expected increase in spending will be related to AI talent and infrastructure. However, even with that increase in spending, Meta expects its operating income to exceed 2025 levels. We should note that this is critical to Wall Street’s ability to continue to endorse AI investment; it means that Wall Street is being asked to believe that Meta will continue to grow future earnings while building the computing capacity and talent required to move the business into the next phase of its development.

Why has META been continuously declining in Q1 2026?

There has been a decline in the company's stock price due to several different reasons; however, none of them imply that the company is failing. To begin with, the market seems to be increasingly skeptical about large amounts of money being spent on AI and this has resulted in increases in capital expenditures with no immediate returns. According to a report by Reuters in March, Meta is said to be planning to spend up to $135 billion on capital expenditures in 2026, in order to secure/obtain AI Cloud capacity. Secondly, Meta has experienced a lot of negative press lately due to legal actions and investigations about youth issues. Lastly, the overall technology stock market has not been performing well either and as a result, Meta has not been able to escape from the general sell-off of technology stocks. 

An even simpler explanation for why Meta's stock has been under pressure is that in the past when a company makes large investments in the future, the market usually sells those companies' stocks before any visible results from those investments are realized. Therefore, based upon Meta's financial statement and the potential of the company's future AI capabilities, investors wonder how long it will take for AI Technology to create incremental revenue for Meta. Until this becomes more transparent, Meta's stock will remain exposed to rising costs or reduced advertising revenues.

Can Meta Stock Rise in 2026?

Meta’s ability to rebound in 2026 will depend on whether investors view AI as a profit-generating mechanism rather than an expense to be absorbed—according to the company’s own guidance. The expected Q1 2026 revenue range of $53.5 billion – $56.5 billion requires no significant change in total op income relative to what was expected in Q4 of 2025 (notches up due to infrastructure spending), and adds significant forward-looking items to keep full-year op income positive vs 2025 levels. So if incoming AI models increase user engagement through improved ad-targeting or developer participation in the overall Meta ecosystem, they should potentially allow the market to value Meta stock based on its earnings sustainability versus being penalized for capital expenditures. I believe this statement is true, based on the scale, cash flows, and distribution of Meta’s products.

The other advantage to this scheme is related to the open-source aspect of Meta’s AI strategy. Historically, Meta’s AI approach has had maximum success when its applications were completely free for all users to access, thereby establishing itself as a regular element of daily user activities. Thus, an AI model that first reaches developers and then subsequently reaches back to increase utilization across the Facebook/Instagram/WhatsApp advertising platforms provides far more potential value than an AI application solely available to members through paid subscriptions. Again, while this does not ensure profitability, it does increase the attractiveness of Meta’s fundamentals relative to any simplistic conclusion that “the spending on AI is very high”.

The Risks Are Still Real

The primary concern is that Meta continues to invest large amounts of money before they see any benefit from it. The expected capex for 2026 is likely in the range of $115 billion to $135 billion, which is a significant amount; furthermore, the company has already indicated that regulatory and legal issues in both the U.S. and Europe could have a serious negative impact on the company’s performance and financial results. Furthermore, in the future, Meta’s Reality Labs losses are expected to be approximately at the same level as 2025, indicating that at least one part of the overall AI and metaverse investment will not be working. This is a tradeoff that investors will have to live with.

Another risk is that AI companies that are ahead of Meta are likely to continue expanding at a pace that could negatively impact their own path to being an AI leader. According to Axios, Meta is attempting to catch up following the Launch of Llama 4, which has tracked significantly behind competitors such as OpenAI and Anthropic. In addition, if the launch of Meta’s AI solution is late, less capable than anticipated, or unable to generate revenues, the company's share price will likely remain depressed, even if AI continues to be an exciting market.

Should Investors Buy Meta Now?

Meta is a stock that has not been priced as a deep-value investment at 24.5x earnings, but it no longer appears to be priced to perfection either. Meta’s strong revenue growth expectations for 2025, large free cash flows, and large user base, combined with the impending rollout of a new AI-based product, makes for a compelling long-term case for the stock (especially after the 2026 correction).  Although OpenAI is likely to remain a focal point in the AI sector, and its resulting IPO will draw attention away from Meta, the company will not need OpenAI to complete its IPO in order to justify holding shares of Meta. The company has the size, cash flow, and distribution capabilities to monetize AI into a significant source of cash flow. For investors who are willing to accept some volatility and can focus on the long-term rather than the short-term, Meta would appear to be a reasonable investment opportunity.