Meta’s Strategic Pivot: Monetizing Threads and Powering AI Ambitions

Meta Platforms is embarking on a dual-pronged strategy to fuel its future, announcing the monetization of its Threads platform while securing a massive, long-term energy supply for its artificial intelligence initiatives. The company's shares, which had faced significant pressure in recent weeks, responded positively to these developments.

Despite outlining plans for colossal capital expenditure, Meta's leadership is demonstrating continued cost discipline. The company confirmed it will eliminate approximately 331 positions in Washington State starting March 2026. These cuts are part of a broader reduction of about 1,500 roles within its Reality Labs division, a unit that continues to report substantial losses. Resources freed up by this streamlining are being redirected toward the "Superintelligence Labs" and the development of advanced AI models.

This comes against a backdrop of investor concern over projected spending. Since late October 2025, when Meta released its third-quarter figures, the stock had declined roughly 20%. This drop was primarily driven by the company's forecast for sharply rising investments: $70 to $72 billion for 2025 and over $100 billion for 2026, raising questions about future free cash flow.

Threads Transitions from Growth to Revenue

A central element of Meta's near-term growth plan is the global rollout of advertising on Threads, commencing next week. The platform has now surpassed 400 million monthly active users, marking a strategic shift from pure user acquisition to a revenue-generation phase. Market analysts anticipate this will become a high-margin revenue stream, potentially making a meaningful contribution to the company's financials by 2026.

The forthcoming quarterly report, scheduled for Wednesday, January 28, 2026, will be scrutinized for early signals. Analysts project Q4 2025 revenue of approximately $58.3 billion, representing a 20.6% year-over-year increase, with earnings per share expected between $8.17 and $10.27. A key focus will be whether management provides any concrete quantification of Threads' expected revenue contribution for the coming year.

Should investors sell immediately? Or is it worth buying Meta?

Securing Energy for an AI-Driven Future

Parallel to its commercial push on Threads, Meta is addressing the enormous power requirements of its AI infrastructure. In a significant move, the company entered into a binding agreement with Oklo on Wednesday for the construction of a nuclear campus with a capacity of up to 1.2 gigawatts. This dedicated energy supply is intended to power planned AI clusters known as "Prometheus" and "Hyperion."

This agreement is a cornerstone of a broader strategy to secure low-carbon electricity for data centers, which are set to require capital investments exceeding $100 billion by 2026.

Analyst Sentiment and Valuation

The recent announcements have bolstered analyst confidence. Truist Securities reaffirmed its "Buy" rating, maintaining a price target of $875 per share, which implies an upside potential of more than 40%. Analysts at the firm anticipate that fourth-quarter results will likely meet or exceed the high end of expectations. Similarly, Jefferies has characterized the stock's recent pullback as an attractive entry point for investors.

From a valuation perspective, the share price decline has brought metrics to more normalized levels. Meta currently trades at a price-to-earnings ratio of approximately 26.7, with a forward P/E of around 21. This places the stock below its historical average and at a notable discount to competitors such as Amazon.