Meta's $10 Billion Anthropic Deal Could Change the AI Story. How to Play META Stock Here.

Meta Platforms (META) has spent years pouring tens of billions of dollars into artificial intelligence (AI). Investors have largely accepted those investments because advertising profits have remained exceptionally strong, but one question has lingered over the stock: When will Meta actually make money from its AI infrastructure?

That question is becoming much more important after reports surfaced that Anthropic is discussing a compute-leasing agreement with Meta that could be worth as much as $10 billion over two years. If completed, the arrangement would represent one of the first major examples of Meta generating direct revenue from the massive AI data centers it has been building.

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Meta will report its second-quarter earnings on July 29. As always, investors will likely be looking for signs that the company's enormous AI investments are beginning to create entirely new revenue streams rather than simply supporting its advertising business.

Meta Platforms Stock Still Looks Reasonably Valued

Despite the rebound in July, Meta Platforms' valuation remains relatively reasonable compared with many AI leaders.

META stock currently trades at roughly 21 times trailing earnings and about 21.4 times forward earnings, below its five-year average multiple of around 26 times. Meta also carries a PEG ratio near 1.07 times, suggesting expected earnings growth largely offsets its current valuation.

After falling roughly 15% during the first half of the year, Meta has recovered sharply. Shares are now down 8% year-to-date (YTD) after rallying this month, with investors embracing the company's evolving AI strategy.

If Meta succeeds in generating recurring revenue from AI infrastructure, today's valuation could prove more attractive than it initially appears.

Meta's AI Investments Are Starting to Change the Narrative

Investors have spent much of the year questioning Meta's aggressive spending plans.

Management expects to spend between $125 billion and $145 billion in capital expenditures during 2026, almost double the roughly $72 billion invested last year. That level of spending initially pressured META stock as investors wondered whether returns would justify the enormous investment.