Cramer's Critique: Has Meta Strayed From Its Path Amid AI Ambitions?
In a candid segment on CNBC's Mad Money, host Jim Cramer turned his spotlight on Meta Platforms (NASDAQ:META), suggesting the tech giant had "lost its way" under CEO Mark Zuckerberg. Cramer pointed to a shrinking price-to-earnings ratio as a signal of eroding market confidence, despite his personal trust in Zuckerberg's leadership.
The critique centers on Meta's aggressive investments in artificial intelligence, which have left some investors uneasy. While the company's core advertising business remains robust—evidenced by a Q4 earnings beat with EPS of $8.88 against an $8.16 forecast—its substantial spending on AI infrastructure and lack of a clear, market-leading AI product have raised questions. Compounding concerns is Meta's shifting balance sheet: net debt has emerged, with cash reserves falling to $44.5 billion against over $51 billion in debt, a notable change from late 2024.
"People were paying 30 times earnings for the stock as recently as a year ago. Now, they're paying just 22 times. Whoa!" Cramer remarked on his January 22 show, framing it as a broader skepticism toward the "Magnificent Seven" tech stocks. He specifically noted Meta's absence of a generative AI platform to rival ChatGPT or Gemini, and no cloud infrastructure business to compete with Amazon or Microsoft.
Yet, in a twist, Cramer later affirmed his "ton of confidence" in Zuckerberg and holds META in his Charitable Trust. This mixed messaging underscores a Wall Street dilemma: can Meta's proven advertising engine fund its AI future without compromising growth?
The market has offered a tentative answer. Since Cramer's January 22 comments, META shares have rallied nearly 14%, fueled by the strong Q4 results that alleviated fears of an ad slowdown. At current levels, the stock trades at a discount to its historical valuation, suggesting potential upside if confidence rebounds.
Street Voices: Divided Opinions on Meta's Trajectory
David Chen, Portfolio Manager at Horizon Capital: "Cramer is highlighting a valid tactical concern, but it's short-sighted. Meta's AI investments are a necessary bet for long-term relevance. Their advertising cash flow is the envy of the industry—it's exactly what funds this transition."
Rebecca Shaw, Tech Analyst at ClearView Research: "The volatility in sentiment is the story here. One week it's 'lost its way,' the next it's a buy on earnings. It shows how narrative-driven this market has become, often divorced from the underlying fundamentals which, for Meta, are still exceptionally strong."
Marcus Thorne, Independent Investor & Frequent Financial Commentator: "This is classic Wall Street hypocrisy. Cramer and the talking heads bash the company for spending, then cheer when beats come from that very spending. Zuckerberg is playing chess while they're playing checkers. The debt talk is a red herring—their operating income can handle it."
Anya Petrova, Founder of "Ethical Tech Watch" Advocacy Group: "It's astounding. The conversation is entirely about stock multiples and AI arms races, with zero regard for the societal damage this company continues to amplify. Has it 'lost its way'? It never had a moral compass to begin with. The financials are just a scorecard for a deeply problematic business model."
As the debate continues, Meta's path forward hinges on balancing its present strength with its costly future ambitions—a challenge that will keep both supporters and skeptics watching closely.