Meta Faces Investor Pressure as OpenAI’s Sora App Threatens to Disrupt Social Media Landscape

Meta Platforms Inc. (NASDAQ: META) is facing renewed investor pressure as OpenAI’s newly launched Sora app shakes up the social media and AI-driven content landscape, raising questions about Meta’s ability to maintain dominance amid rapidly evolving digital trends.

Within just two weeks of launch, OpenAI’s short-form video app Sora has surpassed one million downloads and climbed to the top of the U.S. App Store, signaling a potential paradigm shift in how users engage with AI-generated video content. Analysts warn that Meta — the parent company of Facebook, Instagram, and Threads — may be encountering its own version of Google’s “ChatGPT moment,” when fears of AI disruption first sent shockwaves through the search industry.

Analysts Sound Alarm on Meta’s Competitive Position

In a recent research note, MoffettNathanson analyst Michael Nathanson maintained a buy rating on Meta but cut his price target from $930 to $890, citing mounting competitive and capital expenditure pressures.
“Social media operates in a zero-sum competition for user attention,” Nathanson wrote. “Any perceived threat to Meta’s engagement flywheel — and by extension, its ad monetization engine — could rapidly impact investor sentiment.”

Meta’s shares have declined roughly 4% since Sora’s debut on September 30, reflecting Wall Street’s concern that AI-generated content could become the next major trend in social engagement. If OpenAI succeeds in capturing user time and creativity through its intuitive AI tools, platforms like Instagram Reels and Facebook Watch could face erosion in daily engagement.

Meta’s Response: Vibes and the Race for AI Integration

Meta has not been idle in the AI video race. The company recently unveiled Vibes, an experimental app that allows users to generate short-form videos using AI prompts. However, analysts note that Vibes currently lacks Sora’s technical sophistication — particularly its seamless ability to merge real and AI-generated content — and relies heavily on third-party AI models rather than Meta’s in-house infrastructure.

According to Nathanson, Meta could either expand Vibes as a standalone product or integrate its capabilities directly into Instagram and Facebook. However, catching up to OpenAI’s Sora “will require both time and significant incremental investment,” he added.

AI Investments Could Pressure Margins

Meta’s ongoing AI transformation is proving to be an expensive endeavor. The company has already announced ambitious plans to expand its data center capacity and recruit top-tier AI talent. Most recently, it hired Andrew Tulloch, co-founder of AI startup Thinking Machines, as part of a broader effort to enhance its generative AI strategy.

These investments are expected to drive Meta’s capital expenditures-to-revenue ratio to 43% by 2026, a steep climb from the previous peak of 27% in 2022. Analysts warn that this spending spree could lead to near-term monetization drag, weighing on profit margins and free cash flow as the company pivots toward AI-driven products.

OpenAI’s Growing Influence on Tech Stocks

The rapid success of Sora underscores OpenAI’s growing ability to disrupt established sectors. Initially recognized for its text-based ChatGPT platform, OpenAI is now making inroads into social media — an area historically dominated by Meta, TikTok (ByteDance), and Snapchat.

While Morgan Stanley analyst Brian Nowak remains cautious, saying OpenAI still needs to prove its ability to deliver a “differentiated and sustainable user experience,” the market reaction suggests investors see Sora as more than a novelty. Its viral adoption rate has already triggered comparisons to early TikTok growth patterns.

The Road Ahead for Meta

Despite near-term challenges, Meta remains one of the most profitable tech giants, supported by strong advertising revenue and massive user bases across its platforms. However, maintaining that position will require swift adaptation to the next wave of AI-generated social experiences.

“Meta’s pivot to AI is longer, costlier, and riskier than any product transition before it,” Nathanson warned. “If execution falters or engagement slows, investor patience could wear thin.”

For now, the battle for the future of social media appears to be accelerating — with Sora and Vibes at the center of a new AI-driven content war that could redefine how billions of users create, consume, and connect online.