META's Closed-Loop Cooling Gains Ground: Can it Fuel AI Expansion?

Meta Platforms META is strengthening its AI infrastructure with more efficient cooling technology as rising compute demand makes data-center efficiency increasingly critical.

Building on this momentum, the company recently announced that it is using closed-loop liquid cooling across the majority of its newest AI-optimized data centers to efficiently manage heat generated by increasingly powerful GPUs. The system circulates a water-and-glycol coolant through servers and heat exchangers before reusing it, significantly reducing ongoing water consumption. Meta Platforms expects the coolant to remain usable for up to a decade. Direct-to-chip cooling also enables higher GPU density within server racks, supporting greater computing capacity without substantially expanding data-center space. 

Meta Platforms is additionally using reinforcement learning to optimize cooling operations across facilities. In a data-center pilot, this approach reduced energy consumed by air-cooling supply fans by an average of 20% and lowered water consumption by 4% across varying weather conditions. 

These efficiency gains are expected to support Meta Platforms’ broader AI infrastructure expansion as it scales increasingly compute-intensive models and services. The company is deploying AI across recommendations and advertising while developing personal agents, business agents and enterprise offerings, creating multiple avenues to monetize its growing compute capacity. Meta Platforms believes near-term AI capacity remains highly valuable, with numerous ROI-positive opportunities across its core business. 

In the second quarter of 2026, Meta Platforms has spent $31.1 billion on capital expenditures, primarily for servers, data centers and network infrastructure. The company expects full-year 2026 capital expenditures of $130-$145 billion as it works to maximize computing capacity during 2026 and 2027.

META Faces Stiff Competition

Meta Platforms is facing stiff competition from competitors like Reddit RDDT and Snap SNAP. Both Snap and Reddit are expanding their portfolio in the AI space.

Reddit’s investments in artificial intelligence (AI)-powered tools remain noteworthy. In July 2026, Reddit unveiled new AI-powered moderation tools to combat spam, fake engagement and harmful content. The company said that its automated systems now block 23 million spam views daily, identify roughly 25,000 new spam posts and comments each day, and revoke nearly 2 million inauthentic votes daily. 

Reddit also reduced user exposure to spam by about 20%. Expanded automated enforcement has cut average response time for hateful or violent content to under five seconds, increased enforcement actions by more than 200%, and reduced exposure to potentially harmful content by more than 40%.

Snap is leveraging AI through products like SPECS, which integrate hands-free AI assistance and advanced AR capabilities, positioning the company as a first mover in next-generation computing. AI-powered creative tools such as Lens+ are also driving new subscription revenue streams and enhancing user engagement.

META’s Share Price Performance, Valuation, and Estimates

META’s shares have lost 13.5% in the year-to-date period, underperforming the broader Zacks Computer & Technology sector’s return of 15.4%.

META Stock Performance

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META shares are overvalued, with a forward 12-month Price/Sales of 5.05X compared with the Internet Software industry’s 3.97X. META has a Value Score of C.

META's Valuation

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The Zacks Consensus Estimate for 2026 earnings is pegged at $31.90 per share, which has decreased 3.30% over the past 30 days. This suggests 35.80% year-over-year growth.

Meta Platforms, Inc. Price and Consensus

Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote

Meta Platforms currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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