Can Meta’s AI Ambitions Survive Trump’s Tariff Heat?

Meta Platforms plans to invest up to $65 billion to expand its AI infrastructure in 2025.

Meta Platforms (META) has gained buzz on Wall Street for spending big on AI (artificial intelligence). However, some experts warn that President Donald Trump’s broad tariff plans could slow new data center projects, as they raise concerns about the easy availability of key materials. META stock has fallen over 19% in the past month, hit by a broader market sell-off triggered by Trump’s tariffs. Investors are keeping a close eye on Meta, especially given its large investments in AI and the metaverse.

Meta to Invest $1B in Wisconsin Data Center Project

Last week, Bloomberg News reported that Meta plans to invest nearly $1 billion to build a new data center in central Wisconsin, according to Bloomberg News. Meanwhile, Meta and the Wisconsin Economic Development Corp. have declined to comment on the news.

Overall, Meta has set aside up to $65 billion this year to grow its AI infrastructure, responding to investor pressure to deliver returns on its AI spending.

Is Meta’s AI Push at Risk?

Trump’s new tariffs could raise the cost of key parts like steel, aluminum, and tech gear, making it harder and more costly for Meta to build its AI data centers. This may slow down Meta’s big AI plans and hurt profits. At the same time, higher costs and trade limits could also delay projects.

Moreover, tariffs could weaken the economy and trigger an advertising slowdown, hurting Meta’s main source of profit. According to Main Street Data, Meta generated $46.8 billion of its revenues from advertising, marking 96.7% of revenue in Q4 2024.

Notably, a February survey by the Interactive Advertising Bureau found that 94% of U.S. ad buyers worry tariffs could reduce ad spending.

Even so, some experts believe Meta is better positioned to handle an ad slowdown. For instance, five-star-rated analyst John Blackledge of TD Cowen believes that Meta’s ad business remains strong, thanks to its focus on direct response ads, which usually hold up better in tough times. Direct response ads are designed to get people to take action right away, like clicking a link, signing up, or making a purchase. Last week, Blackledge reduced his price target on META stock from $785 to $725, while maintaining a buy rating.

Is META a Good Stock to Buy Now?

On TipRanks, META stock has a consensus Strong Buy rating among 47 Wall Street analysts. That rating is based on 43 Buys, three Holds, and one Sell assigned in the last three months. The average META price target of $756.98 implies a 50% upside from current levels.

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