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Facebook videos allegedly showing Prime Minister Narendra Modi in an abusive manner have led to a fresh regulatory probe in India against Meta India Managing Di

Key Takeaways META missed Q2 EPS estimates, beat revenue forecasts and saw free cash flow drop 91% year over year. Meta Platforms grew ad impressions and AI-driven Advantage annual revenue run rate to over $75 billion.ETFs like VOX rank Meta Platforms among their top holdings for diversified exposure. Shares of Meta Platforms (META - Free Report) dropped nearly 8% on the bourses yesterday, following the company’s mixed second-quarter 2026 results. The social media giant failed to meet Wall Street estimates for its bottom line, but managed to beat the top-line estimates by a whisker.

The company’s aggressive investments in artificial intelligence (AI) that caused a 91% year-over-year plunge in its free cash flow in the second quarter, along with Reality Labs unit’s persistent and widening operating loss, also disappointed investors, which got duly reflected in META’s share price decline yesterday. This is in sync with the stock’s descent witnessed lately, with META having lost 18.4% year to date.

While the latest share pullback might encourage investors to see this as a golden opportunity to invest in the WhatsApp owner, some might remain skeptical about investing in this stock, considering the overall market’s edginess over the exploding AI investments across the board. 

Nevertheless, the company’s strengthening advertising business, along with the significant gains from its content recommendation initiatives, should continue to fuel its revenue growth in the long term. 

Against this backdrop, investors who believe in Meta’s long-term trajectory, yet wish to avoid the idiosyncratic risk and sharp volatility of a single-stock position, may find a middle ground in exchange-traded funds (ETFs). By selecting funds that feature Meta Platforms as a top-10 holding, investors can capture the potential upside of a rebound while mitigating the impact of company-specific shocks on their overall portfolio.

However, to determine if this post-earnings pullback is a temporary stumble or a sign of deeper structural shifts, it is essential to look beyond the headline figures. Before exploring the best ETFs for gaining exposure to Meta, let us examine the company’s second-quarter performance across other key operational metrics.

A Brief Analysis of META’s Q2 ResultsMETA’s second-quarter earnings of $6.18 per share missed the Zacks Consensus Estimate by 13%, while revenues beat the consensus mark by 1%. On a year-over-year basis, the trend remained similar, with the bottom line falling 13.4% even as the top line grew a robust 28%.

The total number of ad impressions served across META’s services increased 14%, driven primarily by growth in engagement and users, as well as ad load optimizations. 

On the other hand, the global average price per ad increased 12% year over year in the second quarter, as META benefited from ad performance gains, improved macro conditions and currency tailwinds. 

On the operational front, Meta advanced its user understanding models to analyze ads and organic activity and simultaneously improve both user experience and advertiser performance in the second quarter. Combined with its GEM model for ads ranking and sequence learning, these advancements generated an 8.3% increase in ad clicks and a 15.7% uplift in conversions on Facebook.  

Its AI-powered Advantage+ end-to-end solutions showed solid growth, reaching over $75 billion in annual revenue run rate. 

Its Reality Labs segment continued to incur operating losses despite generating positive revenue growth. This unit’s loss widened from $4.53 billion a year ago to $4.62 billion in the second quarter. The reported figure beat analysts’ expectations of a loss of $5.07 billion (analysts polled by StreetAccount, as cited in CNBC). 

Looking ahead, META’s management believes that its distribution advantages will allow it to serve AI products that are valuable for everyone, both its 3.6 billion users and millions of businesses, over the long run. 

As far as its near-term outlook is concerned, META has raised the lower end of its 2026 total expenditure outlook to incorporate the $2.4 billion charge related to legal proceedings, which it recognized in the second quarter. The company now expects its total expenses to be in the range of $165-$169 billion compared with its earlier guidance of $162-$169 billion.

META-Heavy ETFs to WatchVanguard Communication Services ETF (VOX - Free Report)  

This fund, with net assets worth $5.7 billion, offers exposure to 112 U.S. companies within the communication services sector. Of these, META carries the first spot, holding 20.31% of the fund. 

VOX has risen 4.8% over the past year. The fund charges 9 basis points (bps) as fees. It traded at a volume of 0.40 million shares in the last trading session. 

Global X PureCap MSCI Communication Services ETF (GXPC - Free Report)   

This fund, with net assets worth $184.1 million, offers exposure to 24 U.S. companies in the communication services sector. Of these, META is at the third spot, holding 19.50% of the fund. 

GXPC has soared 13.4% over the past year. The fund charges 15 bps as fees. It traded at a volume of 0.30 million shares in the last trading session. 

Communication Services Select Sector SPDR ETF (XLC - Free Report)   

This fund, with assets under management (AUM) worth $22.14 billion, offers exposure to 23 companies from the telecommunication services, media, entertainment and interactive media & services industries. Of these, META is at the top spot, holding 17.22% of the fund. 

XLC has inched up 0.4% over the past year. The fund charges 8 bps as fees. It traded at a good volume of 10.08 million shares in the last trading session.

iShares Global Comm Services ETF (IXP - Free Report)   

This fund, with net assets worth $548.5 million, offers exposure to 64 media, telecom, and internet companies worldwide, from the communication services sector. META holds the top spot, with 16.93% share in the fund. 

IXP has gained 0.7% over the past year. The fund charges 40 bps as fees.  It traded at a volume of 0.02 million shares in the last trading session.

Meta shares sold off after a Q2 EPS miss driven by higher AI infrastructure spending and increased CapEx guidance, raising market concerns over monetization. We maintain a neutral rating on META, preferring direct AI monetization players due to limited visibility on indirect AI-driven revenue growth and quantifiable impact. Despite headline concerns, META's ad business shows robust growth: ad impressions rose 14%, price per ad increased 12%, and Advantage+ AI-powered solutions reached a $75bn ARR.

© Fritz Jorgensen / iStock Editorial via Getty Images

Meta Platforms (NASDAQ:META | META Price Prediction) built the most profitable ad engine on the internet and now spends like a utility company laying grid for the AI era.

Q2 revenue hit $60.801 billion, up 27.96% YoY. EPS came in at $6.18 versus $7.2173 estimated. Shares are down 18.2% YTD to $532.52. Can this stock reach $900 by 2027?

The Real Reason Meta Is Down 18% This Year The Q2 miss cracked the AI narrative. Operating margin compressed to 31% from 43% YoY. Free cash flow collapsed to $784 million from $8.55 billion. Capex jumped 82.1% to $30.116 billion, with full-year guidance narrowed to $130 billion to $145 billion. That is enormous spending for a payoff investors cannot yet see.

JPMorgan cut its target to $640 from $725 and kept a Neutral rating, noting Meta’s visibility into monetizing AI spend beyond advertising remains limited.

Add $2.40 billion in legal charges and $1.18 billion in severance from 8,000 layoffs. Shares fell 11.07% in a week and 4.31% in a month. With a beta of 1.246, Meta swings harder than the market.

Wall Street Sees 55% Upside. Our Model Says 54% The average analyst target sits at $824.68, roughly 54.9% above today’s quote. Of the analyst pool, 8 rate META Strong Buy, 49 Buy, 6 Hold, and 0 Sell. Our base case lands at $817.47, or 53.51% upside with 90% confidence. Bull case is $867.73, bear case $712.57.

JPMorgan’s $640 reflects concerns about developer APIs and compute monetization. But 90% bullish consensus paired with 62.4% YoY earnings growth suggests analysts closer to the ad engine see something JPMorgan is discounting.

The Path to $900 Per Share Reaching $900 from today’s price of $532.52 would require a gain of 69%. With forward EPS of $39.95, a price of $900 implies a forward P/E of 23x. Our base case of $817.47 already implies 16x, meaning the bold target requires 6x of additional multiple expansion.

The 247Factor of 1.113 is driven by 90% bullish analyst consensus and 62.4% earnings growth. The multiple expansion story only works if AI capex starts delivering visible revenue. Corning’s up to $6 billion multi-year optical fiber deal signals hyperscaler-scale buildout.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

Morningstar called AI infrastructure a “dual asset, driving internal ad engine improvements and potentially opening new revenue streams by selling surplus compute capacity to other AI labs”.

Cathie Wood’s Ark bought $14.3M of META post-selloff. Zuckerberg told investors on the Q2 call, “AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities.”

The risk: if compute monetization stays theoretical through 2027, the multiple stays compressed and $900 does not happen.

Where Meta Trades vs Its Earnings Power At $532.52, Meta trades at roughly 13x forward earnings against 62.4% YoY earnings growth. Shares sit 4% below the 52-week high of $793.65 and just above the low of $519.78. Over 10 years, META has returned 337.37%.

The current multiple prices permanent capex drag onto a franchise that just grew revenue 28%.

Is $900 Realistic? The $900 target by 2027 requires a 69% gain from here.

Three things need to break right: AI capex must show measurable ad-revenue lift by early 2027, at least one enterprise compute revenue line must move from theory to disclosure, and operating margin must stabilize above 35%. Another quarter of capex acceleration without revenue attribution would derail it. We’ve outlined the blueprint for how Meta Platforms could reach $900 in 2027.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

People are seen behind a logo of Meta Platforms, during a conference in Mumbai, India, September 20, 2023. REUTERS/Francis Mascarenhas/File Photo Purchase Licensing Rights, opens new tab

SummaryCompaniesPolice preparing to send notice to MetaCase follows India's tightening of content rulesIndia is Facebook's biggest market by usersNEW DELHI, July 31 (Reuters) - Police in the southern Indian city of ​Hyderabad have registered a case against the head of Meta India, Arun Srinivas, over multiple videos ‌posted on the company's Facebook platform that depicted Prime Minister Narendra Modi in an "abusive manner," a senior police officer said on Friday.

The videos spread as Modi contended with the biggest wave of youth-led protests India has seen in more than a decade, a movement ​over leaked papers in national examinations that has led to the resignation of his education minister.

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Police are ​preparing to send a notice to Meta Platforms (META.O), opens new tab regarding the case, said V Aravind ⁠Babu, deputy commissioner of police for cyber crimes in Hyderabad.

Meta did not immediately respond to a Reuters' request ​for comment on Friday.

It was not immediately clear why Srinivas had been named personally, a rare move against a ​senior executive of a global tech firm. India has tightened its content rules this year, narrowing the legal shield that protects platforms from liability for what their users post and raising the exposure of the executives who run them.

Since February, platforms must remove ​unlawful content flagged by courts or the government within three hours, down from 36, or lose that protection.

Holding someone ​personally responsible normally requires proof of "an active role and knowledge," said Akash Karmakar, a technology law partner at Indian law firm ‌Panag & Babu.

Meta ⁠has repeatedly drawn the ire of Indian government over content posted by its users, and faced criticism that it does too little to police hate speech and misinformation on Facebook and Instagram.

FACEBOOK'S BIGGEST MARKET BY USERSThe case builds on a run of tensions between Meta and Modi's government over content tied to the prime minister. Modi has ​faced a barrage of online ​criticism, jokes and ridicule ⁠by protesters in recent weeks.

India's IT ministry summoned Meta executives this week after Facebook briefly restricted a Modi post, with a top official saying the government wanted the company ​to explain the matter at the highest level.

A Meta spokesperson said at the time ​that the ⁠post, which was Modi's first where he addressed the massive student protests, had been blocked inadvertently.

India is Facebook's biggest market by users. Srinivas is Meta's managing director and head for India since July 2025.

The case against him is among many others ⁠that ​were filed based on complaints by supporters of Modi's Bharatiya Janata Party, ​who alleged that manipulated videos and images of the prime minister were being circulated on Meta-owned social media platforms, such as Facebook and ​Instagram, local media reported earlier.

Reporting by Munsif Vengattil; Writing by Hritam Mukherjee; Editing by Tom Hogue and Raju Gopalakrishnan

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Based in Bengaluru, Munsif Vengattil leads Reuters' technology news coverage in India. He tracks themes at the intersection of tech, business, and labor. A reporter for nine years, Munsif has written extensively on India's electronics manufacturing aspirations and its tech policy space, AI and election interference, satellite internet, streaming wars, and data breaches. His stories also focus on investigating corporate strategies and revealing India-specific initiatives and challenges of the biggest of tech firms - from Apple, Facebook, and Google, to Foxconn, Samsung, and Nvidia.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of META, GOOG, AMZN, MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Meta Platforms (META) is experiencing a significant drop in its stock price following its Q2 earnings report, which provided revenue guidance for Q3 that fell s

Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) shares fell as much as 10% on Thursday morning after the company's third-quarter results left investors unconvinced that its massive artificial intelligence spending is translating into tangible returns.

Earnings per share came in at $6.18, well below the $7.22 analysts had expected, even as revenue of $60.8 billion topped forecasts of $60.17 billion. Meta's guidance for the current quarter also fell short, with the company projecting sales of $62.5 billion versus estimates of $63.15 billion.

Total costs rose 55% year-over-year to $42.03 billion, with more than $1 billion of that tied to severance pay following a round of layoffs.

On the earnings call, Meta CEO Mark Zuckerberg declined to offer specific capex guidance for 2027, saying infrastructure planning "remains highly dynamic."

"We're gearing our current infrastructure plans toward maximizing capacity in 2026 and 2027, while giving us the flexibility to continue growing in 2028 and beyond," he said.

Reality Labs, the division behind Meta's virtual reality headsets and wearable AI devices, reported a $4.6 billion loss on sales of $431 million for the quarter.

Zuckerberg said demand for AI compute continues to outstrip supply. "There's just nowhere near enough compute for all the demand," he said. "We're getting a large number of offers for the compute that we have, but we also have a lot of internal uses that we think are going to be quite valuable."

On financing its infrastructure buildout, Meta said it has been shifting toward more debt. "We've been evolving our capital structure in recent years to include a greater mix of debt as we work to bring down our cost of capital," the company said, adding it has "generally found it prudent to continue adding cost-efficient, long-duration sources of capital."

The selloff extends a difficult stretch for Meta stock, which had already fallen for 10 consecutive trading sessions heading into the results, its longest losing streak on record.

Analysts at BofA said the after-hours pressure did not appear to reflect weakening fundamentals, pointing to a 10% rise in time spent on Instagram and a third-quarter revenue outlook implying accelerating two-year growth. Instead, they attributed the drop to investor concerns over Meta's spending direction, compounded by higher stock-based compensation.

XTB research director Kathleen Brooks said investors are still waiting for clearer signs that Meta's AI investments are paying off.

“It’s been a rough couple of weeks for Meta’s share price, which has traded lower for ten consecutive days, its longest losing streak in its history,” Brooks said.

“Although severance costs are only temporary and we could see profitability bounce back in Q3, we think that the sharp selloff in the Meta share price in the post-market is down to the astonishing burn rate of free cash flow.”

Ali Mogharabi and Lauren Cassidy discuss Meta Platforms' (META) shares falling after the company reported an earnings miss and issues lighter than expected guidance, leaving investors underwhelmed despite signs of strength in its core business. Lauren breaks down why the quarter was an overall disappointment, while Ali explains why Meta's fundamentals may be stronger than Wall Street has been giving it credit for.

30.7.2026 19:06

Indexy zažívaly před začátkem obchodní seance významný tlak, jak z geopolitického hlediska ohledně vývoje v Hormuzském průlivu, tak z propadu akcií META, jež hýbala celým trhem. Zároveň včerejší jestřábí signály ze zasedání FEDu trh příliš nepotěšily. Přesto se nálada otočila o 180 stupňů a nyní technologický sektor roste do výšin. Pomohly tomu údaje o inflaci a pokles HDP (teoreticky důvod pro nižší sazby) a zároveň skvělé kvartální výsledky Microsoftu, který je nyní na burze protiváhou Mety. Spolu s růstem Microsoftu nastala i korekce předchozích silných poklesů na čipovém sektoru, který je dnes jak politý živou vodou.

Největší dnešní hvězdou je technologický gigant Microsoft (+16,59 %), který opět ukázal, že dokáže držet tempo s ostatními konkurenčními hyperscalery. Klíčovým bodem výsledků byla služba Azure, kde poptávka po cloudu překonala očekávání včetně zvýšeného výhledu na třetí kvartál. Zároveň investory potěšilo, že jako jediný gigant v oblasti datových center nenavýšil plán výdajů, které se ustálily na přibližných 190 mld. USD.

Oproti tomu společnost META (-9,39 %) nepotěšila svým ziskem i přes mírně vyšší tržby. Zároveň oznámila zvýšení odhadu kapitálových výdajů (Capex) o 5 mld. Ziskovost tohoto vlastníka Facebooku odrážely rostoucí kompromis mezi nadměrnými investicemi do umělé inteligence a náklady na restrukturalizaci, které do značné míry kompenzovaly silné výnosy z hlavního byznysu společnosti v oblasti digitální reklamy.

Čipový sektor dnes patří k těm nejrůstovějším a AMD (+13,22 %) či Sandisk (+23,9 %)  předvádějí nevídaný obrat. Nutno podotknout, že stále jsou na výrazně nižších hodnotách než před měsícem. Trh se naopak stahuje z bezpečných přístavů a PepsiCo (-2,5 %) či Realty Income (-2,29 %) klesají. Na Netflixu (-0,72 %) se dnes vybíral zisk, nicméně nyní se již navrací zpět.

Cena ropy se nadále udržuje na vysokých hodnotách, ale kolísá v úzkém pásmu, jelikož prozatím jednání s Íránem nepřinesla žádné hmatatelné výsledky. Zároveň se ale situace ani nehorší a investoři mají jistou vidinu v toto obnovené jednání. Ropa WTI proto mírně klesá (-0,38 %).

Index Dow Jones +0,95 % na 52083,04 b.
S&P 500 +1,34 % na 7414,17 b.
Nasdaq Composite +2,42 % na 25035,48 b.

Index S&P 500 +1,34 % na 7414,17 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Informační technologie +4,8 % Komunikační služby -2,7 % Zbytná spotřeba +1,7 % Nezbytná spotřeba -2,4 % Průmysl +0,4 % Zdravotní péče -1,8 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Sandisk Corp (SNDK) +23 % Fair Isaac Corp (FICO) -17 % Lam Research Corp (LRCX) +18 % CH Robinson Worldwide (CHRW) -16 % EMCOR Group (EME) +18 % Carvana (CVNA) -12 % Microsoft Corp (MSFT) +16 % L3Harris Technologies (LHX) -11 % Micron Technology (MU) +16 % Altria Group (MO) -9,4 %
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I keep hitting the buy button on Meta Platforms (NASDAQ:META | META Price Prediction) because it is the rare AI story where I do not need the AI part to work for the math to work. That is what keeps pulling me back. If Mark Zuckerberg delivers “personal superintelligence to billions of people,” my upside is uncapped. If he does not, I still own the most profitable advertising machine on the planet, and it keeps mailing me cash while I wait.

That is the win-win risk profile in one paragraph, and the receipts are why I do not flinch when the stock has a week like this one, where shares slid 7.95% from $681.31 to $627.17.

The Core Ad Engine Is a Fortress Start with what funds everything. In Q1 2026, Meta reported revenue of $56.31 billion, up 33.08% year over year, on ad impressions that grew 19% while average price per ad rose 12%. EPS of $10.44 beat consensus by 56.79%, the fifth consecutive beat. This is a business with an 82% gross margin, a 41.44% operating margin, and a 30.24% return on equity, serving 3.56 billion daily users across Facebook, Instagram, WhatsApp, Messenger, and Threads.

The balance sheet backs the ambition. Debt to equity sits at 0.386, net debt to EBITDA at 0.47, and interest coverage at 71.48x. Meta paid roughly $1.35 billion in dividends in Q1 at $0.53 per share, and repurchased $26.25 billion of stock in 2025. At a P/E of 23, I am paying a market multiple for a business with mega-cap profitability and a free cash flow yield of 3.35%.

Why Meta and Not the Obvious Alternatives The two names a reader would reach for instead are Alphabet (NASDAQ:GOOGL) and Snap (NYSE:SNAP). I own some Alphabet too. Meta gets the incremental dollar because the monetization signal is cleaner: 19% impression growth and 12% pricing growth in the same quarter is the kind of dual expansion Search cannot mechanically produce. Snap I pass on entirely. It is a social ad peer with smaller scale and profitability challenges, and I am not interested in buying operating losses when Meta is compounding a 41.44% operating margin.

The Real Risk The thing that could hurt me is the capex line. Meta raised 2026 capex guidance to $125 billion to $145 billion, expenses are running up 35%, and Reality Labs lost another $4.03 billion in Q1 on top of $19.2 billion in 2025. Reddit is loudly divided on this, with one 331-upvote post framing hyperscaler spend as an “AI bubble cracking” signal. I hear it. My response is that FY2025 operating cash flow was $115.8 billion, up 26.8%, and management still expects 2026 operating income above 2025. The core business is funding the bet in cash, not debt.

Forward Conviction The prediction crowd assigns a 94% probability Meta beats again on July 29, and the analyst consensus target sits at $822.69. I keep buying because the downside is a cash-gushing ad monopoly and the upside is superintelligence, and I have never seen a risk profile where both ends of the distribution pay me.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

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Meta Platforms (META) shares fell about 10% on Thursday morning after the Facebook and Instagram parent increased its artificial intelligence spending plans des

Meta is using AI to quickly launch apps, and more are on the way. During this week’s second-quarter earnings call, Meta CEO Mark Zuckerberg said the social giant has new apps in the works, following a recent spate of other launches that included an app for Marketplace sellers, one for Facebook Groups, a vibe-coded gaming app, a newphotos app from Instagram, and an experiment involving AI bedtime stories.

Meta has spent years trying and failing to produce new, standalone social apps to complement its core platforms. Now, the company says that large language models (LLMs) make it possible to ship software faster, allowing it to test new ideas at a quicker pace.

“I’m…excited about how AI is helping our teams speed up product development,” Zuckerberg told investors on Wednesday’s call. “Earlier this year, we shipped Instagram Instants. We also just launched Forum, a standalone Groups app, and Seller, a standalone Marketplace app. I expect it to become a lot easier to ship new apps. So we are planning to build out more ideas and use our recommendation systems to scale them,” he said.

“AI is improving our core business; it’s making our apps more relevant and delivering better results for businesses. We’re starting to deliver more novel products, and we’ll have a lot more there soon as well,” Zuckerberg said.

Meta has been down this road before. In its earlier days, Meta (then known as Facebook) ran an internal incubator called Creative Labs, which aimed to test new social concepts.

That effort produced a handful of launches: the photo-sharing app Slingshot, an anonymous chat app Rooms, a Flipboard competitor called Paper, the Moments photo-sharing app, and a collaborative video app known as Riff. Those experiments came to an end in 2015, and the apps were eventually all shuttered, as the company struggled to find an audience for its efforts.

In the early 2020s, Meta tried again, this time with an internal R&D group, NPE Team, which tested apps that included the chat app Bump, social music app Aux, task app Move, dating app Spark, calling app CatchUp, zine maker E.gg, events app Venue, creator Q&A app Hotline, Cameo competitor Super, couples app Tuned, music app BARS, and others.

Again, none became a breakout success, and the apps were shut down.

Now Meta can point to at least one example of how AI is helping new apps scale. It has finally delivered a modest hit with Threads, which now has 500 million monthly active users. Zuckerberg likes to say Threads will one day become the company’s next billion-user app.

With Threads, Meta learned to heavily lean on its existing user base to help initially seed the app with people, then continued to heavily promote it across its existing platforms, including Facebook and Instagram. But LLMs are another key factor in Threads’ growth, as the company said it sees “significant gains” from its AI-powered content recommendations.

“We are finding that LLMs are increasingly capable of delivering ranking and recommendations gains,” Meta’s CFO Susan Li told investors on the call. “First, they make our existing systems smarter by understanding what the content is actually about and generating better training data. Second, LLM-powered agents are also helping with engineering development by evaluating content quality, detecting trends, and testing ranking changes.”

Li added that earlier this year, Meta reached a milestone: every Reel and Feed post on Instagram is now automatically processed through an LLM and analyzed for topic and tone, which helps improve recommendations.

The company is also developing LLM-native recommendation systems, which could help it to better scale new apps as they arrive.

Investors didn’t follow up with company executives to ask more questions about the new apps Meta has in the works, as they were more concerned with AI spending and Meta’s growing enterprise ambitions. However, Zuckerberg suggested that people won’t have long to wait to see what’s next, saying the “new consumer products” were “releasing soon.”

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Sarah has worked as a reporter for TechCrunch since August 2011. She joined the company after having previously spent over three years at ReadWriteWeb. Prior to her work as a reporter, Sarah worked in I.T. across a number of industries, including banking, retail and software.

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As Meta Platforms, Inc. (NASDAQ: META) stock wiped out more than $160 billion over the past 24 hours, more than a dozen Wall Street analysts set its 12-month price target on July 30.

On Thursday, Lloyd Walmsley, an analyst at Mizuho, reiterated an ‘Outperform’ rating for META stock. Walmsley lowered the firm’s 12-month price target to $750 from $835, which represents a 10.18% decline. With Meta shares trading at $533.27 at press time, he signals a potential 40.64% upside. 

“We remain buyers on the dip and expect a near-term compute monetization product. While Meta did not outline definitive plans to sell compute today, management indicated it will have ‘more to share’ on AI monetization soon,” Walmsley noted.

Walmsley expects Meta to expand its AI (Artificial Intelligence) monetization through products such as compute, coding tools, API (Application Programming Interface) access, and Business AIs, while highlighting continued strength in its advertising business. He noted that advertising revenue growth excluding foreign exchange (FX) accelerated by 60 basis points on a two-year basis, with the high end of revenue guidance implying roughly 4 percentage points of sequential acceleration in Q3.

The analyst also said the increase in FY2026 cost guidance reflected only a legal fine, while the unchanged high end of capital expenditure guidance leaves FY2027 expectations largely unchanged.

As all the Wall Street analysts signaled bullish sentiment for Meta shares, 42 analysts surveyed by TipTanks have issued an average 12-month price target of $764.92, implying a possible 43.18% upside. 

Among other experts who reiterated a Buy rating for this company today are Ken Gawrelski, an analyst from Wells Fargo & Co. (NYSE: WFC), Jeffrey Wlodarczak from Pivotal Research, and Brad Erickson, a researcher at RBC Capital.

Price outlook META stock price has fallen more than 11% over the past 5 days, trading at about $533.27 at the time of reporting. The stock tumbled after its latest Meta quarterly earnings report revealed that ballooning AI infrastructure costs squeezed profit margins and reduced free cash flow, hence missing Wall Street’s expectations, as Finbold explained.

Meta stock 5D chart. Source: Finbold However, Wall Street analysts remain bullish on the company’s stock amid expectations of revenue growth fueled by AI monetization.

Jenny Horne breaks down Meta Platforms' (META) second quarter earnings, highlighting AI driven ad growth, weaker than expected earnings, a sharp drop in free cash flow, and massive capital expenditures. Joe Tigay walks us through an example options trade for Meta.

Meta Platforms (META, Financials), the social media and digital advertising company, reported a steep drop in second-quarter free cash flow as artificial intell

Meta reported second-quarter revenue of $60.8 billion, topping the analyst consensus estimate of $59.5 billion. However, adjusted earnings of $6.18 per share missed expectations of $7.13. The company also raised the low end of its 2026 capital expenditure outlook to a range of $130 billion to $145 billion.

Despite the selloff, Jefferies analyst Brent Thill and CNBC’s Jim Cramer said Meta still has long-term upside. Both argued, however, that investors want clearer evidence that the company’s massive AI investments will generate meaningful revenue.

AI Spending Needs Stronger Revenue StoryThill told CNBC on Thursday that investors are looking for more clarity on the businesses that will fund Meta’s growing AI investments. He said the company has yet to clearly outline whether future growth will come from cloud computing, messaging, AI services or other initiatives.

He added that the debate reflects a broader concern across the technology sector: when generative AI investments will begin producing meaningful returns and how long companies can sustain elevated spending.

Jefferies Still Sees More UpsideThill reiterated his Buy rating and $825 price forecast on Meta. He said the company still has significant earnings growth potential and does not require a premium valuation to justify further upside.

He also described Meta as one of the least-loved large-cap internet stocks, saying it still has “more gas in the tank” and enough room to launch new products and services that can drive higher returns over the next year.

Cramer Calls For Greater Spending DisciplineCramer said Meta’s second-quarter results tested his confidence in management after the company missed bottom-line expectations and issued softer-than-expected guidance.

While he criticized Meta’s continued heavy AI spending and called for stricter cost discipline, he said he would continue holding the stock.

Cramer also urged the company to better monetize WhatsApp and take a more aggressive approach to litigation, adding that investor sentiment could improve now that uncertainty around the Federal Reserve has eased.

Meta Platforms Price ActionMETA Price Action: Meta Platforms shares were down 9.63% at $529.19 during premarket trading on Thursday. The stock is near its 52-week low of $520.26, according to Benzinga Pro data.

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SummaryMeta Platforms, Inc. faces declining growth, shrinking margins, and a weakening balance sheet amid aggressive AI capex.We see no clear evidence yet of returns on META's heavy investment. Valuation at 36x TTM unlevered pretax FCF despite deteriorating fundamentals remains rich.Technically, META has not established a buyable bottom; no volume buildup or price spike confirms a reversal at current lows.We rate META at Do Nothing, preferring to await a proven low.Looking for a helping hand in the market? Members of Growth Investor Pro get exclusive ideas and guidance to navigate any climate. Learn More »DISCLAIMER: This note is intended for U.S. recipients only and, in particular, is not directed at, nor intended to be relied upon by, any UK recipients. Nothing in this note is intended to be investment advice, nor should it be relied

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Meta's spending on AI is ramping, and investors want proof that the company can make serious money in areas other than advertising.

The company's all-out splurge is running into higher costs, borrowing constraints and investor pushback.

SummaryCompaniesSelling AI services more profitable than selling computing power: ZuckerbergMeta weighs selling compute at a premium against building out its AICFO Li says AI capacity is valuable because the industry underbuiltMeta shares down 9% in premarket tradingJuly 30 (Reuters) - Meta (META.O), opens new tab can simultaneously fuel its own AI ambitions and rent out its scarce computing capacity to bolster returns, CEO Mark Zuckerberg signaled ​on Wednesday. The problem is: investors aren't buying it.

The Instagram owner is splurging billions to build compute - chips, servers, energy and data centers that power AI - leaving ‌it with free cash flow of just $784 million in the second quarter to run and grow its business. That collapse, of 91% from a year ago, drove its stock down 9% premarket on Thursday.

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Pressed by analysts for details on Meta's plans, Zuckerberg framed compute as a scarce strategic asset that the company should keep and build around, rather than simply sell for short-term profit.

But he acknowledged that the company had received a number of offers for its ​computing capacity from businesses that wanted to deploy their own AI plans "at a meaningful premium" over what it invested to build that capacity.

That tension sits at the heart of Meta's ​challenge in diversifying its revenue stream. Renting out compute could ease Meta's cash-flow squeeze, but would also divert scarce resources from its own push ⁠to build AI models and services.

Having built its fortune selling ads on Facebook and Instagram, the company is now trying to take on larger rivals including Microsoft (MSFT.O), opens new tab, Alphabet (GOOGL.O), opens new tab and Amazon (AMZN.O), opens new tab that have deep ​ties to enterprises, an early and lucrative market for AI.

Microsoft on Wednesday showed how its AI bets were paying off even as its free cash flow fell 23%. The Windows maker breezed past expectations ​for growth in its Azure cloud unit and Copilot assistant thanks to a huge base of corporate customers and its early AI build-out, sending its stock up 8%.

SPENDING LIKE A CLOUD GIANT"We believe that there will continue to be a significantly higher margin on selling intelligence rather than selling compute directly, but we think that there's a big opportunity obviously to sell compute as well," he said, as he painted a picture of what Meta hopes to ​build with its AI spending spree.

Zuckerberg argued that AI-powered personal assistants could become a mass-market product used by billions of consumers, while business agents could eventually help companies handle customer service, sales ​and marketing.

But beyond broad references to subscriptions and enterprise services, he offered few specifics on how those businesses would justify Meta's massive AI spending.

Responding to a question from J.P.Morgan analyst Doug Anmuth, who noted that Meta was ‌also purchasing ⁠capacity from third parties while selling compute, Zuckerberg said Meta was intentionally investing ahead of demand.

"There is a lead time where we're investing in building out these data centers now. They come online at some point in the future. You obviously are not getting value out of them until they're online," he said.

"Meta is spending like a hyperscaler without a hyperscaler's business model," said Josh Gilbert, online investing platform eToro's lead APAC analyst, referring to large cloud companies.

"Microsoft, Alphabet and Amazon can point their data centre dollars at cloud businesses that sell compute straight back out the door, but Meta doesn't have ​the same outlet, so every dollar of build-out ​leans on the ads business."

METAVERSE SCAREMeta's massive ⁠AI spending push has unnerved some investors, who are drawing parallels to the company's costly pivot to the metaverse - a bet that racked up tens of billions of dollars in losses without becoming a large revenue generator.

Its free cash flow slump in the April-June quarter was the steepest since late ​2022, when the metaverse bet attracted similar investor scrutiny.

Still, Meta raised the low end of its capital spending forecast by $5 billion, lifting the ​range to between $130 billion and $145 ⁠billion.

That echoes Alphabet, which raised its own forecast by $15 billion last week, reported its first cash burn on record and was punished with a 7% share drop.

Meta CFO Susan Li said on a post-earnings call that the spending was justified because the industry had "underbuilt historically" for AI demand, making existing capacity "extremely valuable."

She said capacity would remain tight "for the foreseeable future," creating opportunities for Meta to generate returns through products, enterprise services ⁠and compute sales.

But ​responding to a question from Wells Fargo analyst Ken Gawrelski on whether Meta planned to internally use all its ​compute capacity through 2027, Li ended the call much as Zuckerberg had started it: arguing Meta could find profitable uses for additional compute both inside and outside the company, without indicating where those returns would ultimately be the greatest.

"The earnings call ​felt a lot like a good old-fashioned brainstorming session," said Bernstein analyst Mark Shmulik.

Reporting by Aditya Soni, Deborah Sophia and Jaspreet Singh in Bengaluru and Sayantani Ghosh in San Francisco; Editing by Saumyadeb Chakrabarty

Our Standards: The Thomson Reuters Trust Principles., opens new tab

American Rare Earths Ltd (ASX:ARR, OTCQX:ARRNF) has reaffirmed its commitment to securing a NASDAQ listing as it positions the Halleck Creek Rare Earths Project to benefit from growing US demand for domestically sourced critical minerals.

The company is evaluating several potential routes to the US exchange, including a direct compliance listing, a US initial public offering and alternative transaction structures available to developers with American critical minerals assets.

A leading North American financial adviser has been engaged to assess transaction structures, market timing and investor positioning, although no final decision has been made on the preferred pathway.

US listing preparations advance American Rare Earths is progressing the technical and financial reporting work required to support a US listing.

BDO Audit Pty Ltd is leading the company’s Public Company Accounting Oversight Board audit process, which is a prerequisite for listing on NASDAQ.

In parallel, the company is converting the mineral resource and reserve reporting for Halleck Creek to the US Securities and Exchange Commission’s Regulation S-K subpart 1300 standard.

This work is intended to provide US investors, analysts and regulators with technical disclosures prepared under the framework required for SEC registrants, while enabling American Rare Earths to move quickly once a listing structure is selected.

Chief executive officer Mark Wall said NASDAQ was the right market for the company given the scale and strategic importance of its flagship US asset.

“Our flagship Halleck Creek project is a US asset of strategic national significance, and our listing platform should reflect that,” he said.

US policy supports domestic rare earths The listing strategy comes as the US Government moves to further reduce reliance on critical materials sourced from countries including China, Russia, Iran and North Korea.

American Rare Earths highlighted Executive Order 14415, signed on July 20, 2026, which restricts waivers relating to covered materials from January 1, 2027 and directs defence contractors to qualify alternative domestic supply sources.

The company believes the order strengthens the demand outlook for US-mined and processed rare earths and reinforces the strategic importance of Halleck Creek.

The order also recognises acquisitions from US Government-supported critical minerals projects, potentially providing a clearer route for qualifying domestic developments to participate in defence-linked supply chains.

American Rare Earths plans to continue engaging with US Government stakeholders as associated supply-chain mapping and domestic-source qualification regulations are developed over the next 90 to 180 days.

Halleck Creek development Halleck Creek in Wyoming hosts what the company describes as the largest known rare earth deposit in the United States on a total rare earth oxide basis.

The Cowboy State Mine area is being assessed as a potential open-pit operation on Wyoming State land, where the project may benefit from an established permitting framework.

Feasibility-stage drilling is underway alongside a Whole of Property Development Assessment being completed by a US engineering firm.

Development plans contemplate onsite mineral processing and separation facilities, with the project targeting markets including defence, advanced manufacturing, electric vehicles, wind energy and semiconductors.

Next steps American Rare Earths will continue assessing its NASDAQ listing options while advancing the PCAOB audit and S-K 1300 conversion work.

The company will also progress feasibility studies, drilling, permitting and broader development activities at Halleck Creek, with project execution remaining central to its strategy.

About American Rare Earths American Rare Earths is a critical minerals developer focused on building a domestic US rare earths supply chain.

Through wholly owned subsidiary Wyoming Rare (USA) Inc, the company is advancing Halleck Creek and working with US Government-supported research programs on new rare earth extraction and processing technologies.

Total Revenue: $60.8 billion, up 28% year-over-year (27% on a constant currency basis).Family of Apps Revenue: $60.4 billion, up 28% year-over-year.Family of Ap