Meta Platforms Stock: UK Regulator Opens Investigation Into WhatsApp Data

TLDR

• UK regulator Ofcom has launched an investigation into Meta Platforms over potentially incomplete or inaccurate information about WhatsApp
• The probe centers on data Meta submitted during Ofcom’s review of the wholesale market for business bulk SMS messages
• HSBC maintains a Buy rating on Meta stock with a $905 price target, citing AI benefits to advertising business
• Meta’s capital expenditures expected to grow by approximately $39.4 billion in 2026
• Meta stock currently trades at $647.63 with analyst price targets ranging from $685 to $1,117

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British telecommunications regulator Ofcom dropped a bombshell on Meta Platforms this week. The watchdog announced it’s investigating whether the tech giant provided complete and accurate information about WhatsApp during a market review.

Meta Platforms, Inc., META

The investigation focuses on Meta’s submissions during Ofcom’s examination of the wholesale market for business bulk SMS messages. These are the texts you get for appointment reminders and package delivery updates.

Ofcom stated the available evidence suggests Meta’s responses may not have been complete and accurate. The regulator conducted this SMS market review last year.

The timing is interesting given Meta’s broader push into AI and advertising. HSBC recently reiterated its Buy rating on Meta stock with a $905 price target.

The investment bank points to Meta’s early involvement in AI models and heavy tech investments. These efforts already support Meta’s advertising business by driving higher usage and increasing ad space.

Meta’s financial health looks solid on paper. The company boasts 82.01% gross profit margins and 21.27% revenue growth over the last twelve months.

Meta stock currently trades at $647.63. That’s well below HSBC’s target but within the broader analyst range of $685 to $1,117.

Capital Spending on the Rise

Meta has signaled major spending increases ahead. The company guided that capital expenditure dollar growth in 2026 will be substantially larger than the $32 billion increase expected in fiscal year 2025.

Market consensus anticipates capital expenditures to grow by approximately $39.4 billion in 2026. That’s a hefty jump in infrastructure and technology investment.

Total expenses will also climb faster. Meta indicated that total expenses will grow at a faster percentage rate in 2026 than in 2025.

Consensus expectations point to 23% growth in 2025 and 28% growth in 2026. These numbers reflect Meta’s aggressive AI push.

AI Strategy Takes Center Stage

HSBC acknowledges Meta isn’t the best positioned company in Generative AI traffic. Competitors like OpenAI, Gemini, Deepseek, and Claude lead that race.

But Meta’s initial focus has been different. The company is leveraging AI for its main advertising business rather than chasing pure AI traffic.

Meta’s valuation appears in line with its fair value. The stock trades at a P/E ratio of 28.56.

The UK investigation adds a wrinkle to Meta’s otherwise bullish outlook. Ofcom’s probe specifically examines information provided during the wholesale SMS market review.

Business bulk SMS messages represent a specific market segment. Companies use these services for customer communications like appointment reminders and delivery notifications.

Ofcom has not disclosed specific details about what information may have been incomplete or inaccurate. The regulator launched the investigation based on available evidence from last year’s market review.

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