Meta Platforms (META -1.31%) tumbled on its second-quarter earnings report Wednesday.
The stock was down more than 10% at one point after hours, as it badly missed bottom-line estimates, with expenses jumping in part due to one-time costs for legal proceedings and severance payments.
Earnings per share fell from $7.14 to $6.18, well below the consensus at $7.22.
I predicted Meta Platforms would spike on the report, but that didn't happen. The company delivered strong results on the top line, with revenue up 28% to $60.8 billion, beating estimates at $60.3 billion, as the core advertising business drove 14% growth in ad impressions and a 12% increase in average price per ad.
However, investors were understandably more focused on falling profits and its capital expenditures, which are now expected to be $130 billion-$145 billion, as free cash flow in the quarter was less than $1 billion, including payments on finance leases. Management also did little to assuage concerns about overspending on capex, saying that it saw a "massive" opportunity in AI.
Management also seemed less enthusiastic about its new cloud business than investors had hoped, as the company still prefers to use its AI chips internally, where it says it gets a higher return on investment.
Image source: Getty Images.
Why the stock could bounce back Meta's sell-off is reminiscent of Alphabet's last week, when an otherwise solid report was marred by an increase in capex to around $200 billion, leading to its first quarter of negative free cash flow as a publicly traded company.
However, this isn't a typical earnings miss. This is a dominant company making a choice to spend aggressively to be a leader in the next major technology, AI. Paying for the infrastructure to do so is expensive, but Meta has a fast-growing, high-margin ad business to support it, and that business looks as strong as ever.
Today's Change
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585.61
If the after-hours pullback holds, Meta stock will be trading at a price-to-earnings ratio of just 21, and adjusting for one-time tax penalties, it trades at a P/E of just 18. That's an unbelievable bargain for a company expected to continue growing revenue by more than 20%.
At this point, it seems that investors are betting that Meta's AI investments won't deliver any returns, but that's a low bar for the company to overcome, and it creates substantial upside potential if they do pay off. If needed, the company can scale back on its AI investments, and investors can reap the benefits of the blockbuster ad business at a dirt cheap price.
44 Wealth Management LLC grew its stake in Meta Platforms, Inc. (NASDAQ:META – Free Report) by 71.8% in the 1st quarter, according to its most recent filing with the Securities and Exchange Commission. The institutional investor owned 5,865 shares of the social networking company’s stock after purchasing an additional 2,451 shares during the quarter. Meta Platforms comprises about 1.2% of 44 Wealth Management LLC’s holdings, making the stock its 13th biggest holding. 44 Wealth Management LLC’s holdings in Meta Platforms were worth $3,355,000 as of its most recent filing with the Securities and Exchange Commission.
Several other institutional investors and hedge funds have also recently modified their holdings of META. RHL Group LLC purchased a new position in shares of Meta Platforms during the 4th quarter worth approximately $28,000. Strategic Wealth Advisors LLC purchased a new position in shares of Meta Platforms in the 4th quarter valued at approximately $29,000. Safe Harbor Fiduciary LLC purchased a new position in shares of Meta Platforms in the 4th quarter valued at approximately $42,000. Bayban boosted its position in shares of Meta Platforms by 100.0% during the first quarter. Bayban now owns 70 shares of the social networking company’s stock valued at $40,000 after purchasing an additional 35 shares in the last quarter. Finally, Key Capital Management INC bought a new stake in shares of Meta Platforms during the fourth quarter valued at approximately $48,000. 79.91% of the stock is owned by hedge funds and other institutional investors.
Trending Headlines about Meta Platforms Here are the key news stories impacting Meta Platforms this week:
Positive Sentiment: Second-quarter revenue rose 28% year over year to $60.8 billion, exceeding the $60.2 billion consensus estimate. Advertising revenue increased 27%, ad impressions grew 14%, and average price per ad rose 12%, indicating that Meta’s core advertising business remains robust. Meta stock sinks as Q2 earnings disappoint on multiple fronts Positive Sentiment: Meta said Reality Labs lost more than $4.6 billion, but the loss was narrower than analysts expected. The company also continues pursuing enterprise AI, including business agents for customer service and other workplace functions. Meta’s Reality Labs lost over $4.6 billion in second quarter Positive Sentiment: A $14 billion El Paso data-center venture with BlackRock will help Meta secure approximately one gigawatt of AI capacity while sharing financing and balance-sheet risk. The structure could reduce the immediate burden of Meta’s infrastructure buildout, although Meta remains the facility’s primary tenant. Meta, BlackRock partner on $14 billion El Paso data center Positive Sentiment: Some analysts remain bullish: Guggenheim reaffirmed a Buy rating with an $800 price target, while a Seeking Alpha analysis cited a normalized operating margin of roughly 36.8% after excluding legal and severance charges. Meta Platforms Q2: The Market Sells, I Buy The Dip Neutral Sentiment: Meta forecast third-quarter revenue of $61 billion to $64 billion, broadly around but slightly below the $63.2 billion consensus midpoint. No EPS outlook was provided in the reported guidance. Zuckerberg also promoted open AI development and opposed restrictions on Chinese AI models, positions that may support innovation but could attract regulatory scrutiny. Zuckerberg says Meta’s enterprise AI opportunity extends beyond agents Negative Sentiment: Second-quarter EPS fell to $6.18, missing estimates near $7.1–$7.2 and declining from $7.14 a year earlier. Results were pressured by approximately $2.4 billion of legal costs and $1.2 billion of severance expenses. Meta misses profit expectations, sticks to massive AI spending Negative Sentiment: Meta plans to spend approximately $130 billion to $145 billion on AI and data-center infrastructure this year, with the minimum raised by $5 billion. Investors fear the spending will compress margins and free cash flow before a direct AI revenue stream is proven. Meta shares tumble as AI spending stuns Wall Street Negative Sentiment: COO Javier Olivan sold shares under a pre-arranged Rule 10b5-1 plan, reducing his holdings in two transactions. Because the sales were scheduled, they are a limited bearish signal but may reinforce investor caution. SEC insider transaction filing Analyst Upgrades and Downgrades A number of equities analysts have issued reports on META shares. Bank of America decreased their price objective on Meta Platforms from $885.00 to $820.00 and set a “buy” rating for the company in a report on Monday, April 20th. The Goldman Sachs Group downgraded shares of Meta Platforms from a “buy” rating to a “sell” rating in a research report on Tuesday, June 2nd. TD Cowen decreased their price target on shares of Meta Platforms from $820.00 to $800.00 and set a “buy” rating for the company in a research note on Thursday, April 30th. Roth Capital reissued a “buy” rating on shares of Meta Platforms in a research report on Thursday, April 30th. Finally, BNP Paribas Exane started coverage on shares of Meta Platforms in a research note on Tuesday, June 2nd. They set an “outperform” rating on the stock. Five research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, eight have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and a consensus price target of $835.64.
Read Our Latest Report on Meta Platforms
Meta Platforms Stock Down 1.3% NASDAQ:META opened at $585.61 on Thursday. The company has a debt-to-equity ratio of 0.24, a quick ratio of 2.35 and a current ratio of 2.35. The firm has a market cap of $1.48 trillion, a P/E ratio of 21.29, a P/E/G ratio of 0.99 and a beta of 1.25. Meta Platforms, Inc. has a fifty-two week low of $520.26 and a fifty-two week high of $796.25. The firm has a 50-day simple moving average of $603.59 and a two-hundred day simple moving average of $624.24.
Meta Platforms (NASDAQ:META – Get Free Report) last issued its earnings results on Wednesday, July 29th. The social networking company reported $6.18 EPS for the quarter, missing the consensus estimate of $7.19 by ($1.01). The business had revenue of $60.80 billion for the quarter, compared to analysts’ expectations of $60.22 billion. Meta Platforms had a net margin of 32.84% and a return on equity of 36.93%. The business’s revenue for the quarter was up 28.0% on a year-over-year basis. During the same quarter in the prior year, the business posted $7.14 earnings per share. Analysts predict that Meta Platforms, Inc. will post 29.4 earnings per share for the current fiscal year.
Meta Platforms Dividend Announcement The company also recently disclosed a quarterly dividend, which was paid on Thursday, June 25th. Investors of record on Monday, June 15th were given a dividend of $0.525 per share. This represents a $2.10 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date was Monday, June 15th. Meta Platforms’s dividend payout ratio is 7.63%.
Insider Transactions at Meta Platforms In other news, CFO Susan J. Li sold 9,195 shares of Meta Platforms stock in a transaction on Monday, May 18th. The shares were sold at an average price of $607.84, for a total transaction of $5,589,088.80. Following the transaction, the chief financial officer owned 13,186 shares in the company, valued at $8,014,978.24. This trade represents a 41.08% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Curtis J. Mahoney sold 2,079 shares of the business’s stock in a transaction on Wednesday, May 27th. The shares were sold at an average price of $609.92, for a total transaction of $1,268,023.68. Following the sale, the insider directly owned 1,118 shares of the company’s stock, valued at approximately $681,890.56. The trade was a 65.03% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 39,325 shares of company stock worth $23,979,087 in the last ninety days. Insiders own 13.53% of the company’s stock.
Meta Platforms Company Profile (Free Report)
Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
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Absolute Gestao de Investimentos Ltda. bought a new stake in Meta Platforms, Inc. (NASDAQ:META – Free Report) during the first quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor bought 3,500 shares of the social networking company’s stock, valued at approximately $2,002,000.
Several other institutional investors and hedge funds also recently made changes to their positions in the business. RHL Group LLC bought a new stake in shares of Meta Platforms in the 4th quarter worth about $28,000. Strategic Wealth Advisors LLC bought a new stake in Meta Platforms in the fourth quarter valued at about $29,000. Safe Harbor Fiduciary LLC acquired a new stake in Meta Platforms during the fourth quarter valued at approximately $42,000. Bayban lifted its holdings in Meta Platforms by 100.0% during the 1st quarter. Bayban now owns 70 shares of the social networking company’s stock worth $40,000 after buying an additional 35 shares during the last quarter. Finally, Key Capital Management INC bought a new position in Meta Platforms during the 4th quarter worth approximately $48,000. 79.91% of the stock is currently owned by hedge funds and other institutional investors.
Analyst Upgrades and Downgrades A number of research analysts have recently issued reports on META shares. Rothschild & Co Redburn raised their price target on shares of Meta Platforms from $900.00 to $1,000.00 and gave the stock a “buy” rating in a research report on Tuesday, July 21st. Piper Sandler initiated coverage on shares of Meta Platforms in a research report on Tuesday, June 2nd. They set an “overweight” rating for the company. Royal Bank Of Canada reiterated an “outperform” rating and set a $810.00 price objective on shares of Meta Platforms in a research note on Monday, June 1st. The Goldman Sachs Group cut shares of Meta Platforms from a “buy” rating to a “sell” rating in a report on Tuesday, June 2nd. Finally, Wall Street Zen downgraded Meta Platforms from a “buy” rating to a “hold” rating in a research note on Saturday, May 16th. Five analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, eight have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $835.64.
Read Our Latest Stock Report on META
Insiders Place Their Bets In other Meta Platforms news, insider Curtis J. Mahoney sold 2,079 shares of the company’s stock in a transaction that occurred on Wednesday, May 27th. The shares were sold at an average price of $609.92, for a total value of $1,268,023.68. Following the transaction, the insider owned 1,118 shares in the company, valued at approximately $681,890.56. This represents a 65.03% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Susan J. Li sold 9,195 shares of the stock in a transaction on Monday, May 18th. The stock was sold at an average price of $607.84, for a total value of $5,589,088.80. Following the sale, the chief financial officer owned 13,186 shares of the company’s stock, valued at approximately $8,014,978.24. This represents a 41.08% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 39,325 shares of company stock worth $23,979,087 over the last quarter. Company insiders own 13.53% of the company’s stock.
Meta Platforms Trading Down 1.3% Shares of Meta Platforms stock opened at $585.61 on Thursday. The business has a fifty day simple moving average of $603.59 and a 200-day simple moving average of $624.24. Meta Platforms, Inc. has a fifty-two week low of $520.26 and a fifty-two week high of $796.25. The firm has a market cap of $1.48 trillion, a price-to-earnings ratio of 21.29, a price-to-earnings-growth ratio of 0.99 and a beta of 1.25. The company has a quick ratio of 2.35, a current ratio of 2.35 and a debt-to-equity ratio of 0.24.
Meta Platforms (NASDAQ:META – Get Free Report) last issued its earnings results on Wednesday, July 29th. The social networking company reported $6.18 earnings per share for the quarter, missing analysts’ consensus estimates of $7.19 by ($1.01). The business had revenue of $60.80 billion for the quarter, compared to the consensus estimate of $60.22 billion. Meta Platforms had a return on equity of 36.93% and a net margin of 32.84%.The company’s quarterly revenue was up 28.0% on a year-over-year basis. During the same quarter in the previous year, the business posted $7.14 earnings per share. On average, equities analysts forecast that Meta Platforms, Inc. will post 29.4 EPS for the current fiscal year.
Meta Platforms Announces Dividend The firm also recently announced a quarterly dividend, which was paid on Thursday, June 25th. Shareholders of record on Monday, June 15th were paid a dividend of $0.525 per share. This represents a $2.10 annualized dividend and a yield of 0.4%. The ex-dividend date of this dividend was Monday, June 15th. Meta Platforms’s payout ratio is 7.63%.
More Meta Platforms News Here are the key news stories impacting Meta Platforms this week:
Positive Sentiment: Second-quarter revenue rose 28% year over year to $60.8 billion, exceeding the $60.2 billion consensus estimate. Advertising revenue increased 27%, ad impressions grew 14%, and average price per ad rose 12%, indicating that Meta’s core advertising business remains robust. Meta stock sinks as Q2 earnings disappoint on multiple fronts Positive Sentiment: Meta said Reality Labs lost more than $4.6 billion, but the loss was narrower than analysts expected. The company also continues pursuing enterprise AI, including business agents for customer service and other workplace functions. Meta’s Reality Labs lost over $4.6 billion in second quarter Positive Sentiment: A $14 billion El Paso data-center venture with BlackRock will help Meta secure approximately one gigawatt of AI capacity while sharing financing and balance-sheet risk. The structure could reduce the immediate burden of Meta’s infrastructure buildout, although Meta remains the facility’s primary tenant. Meta, BlackRock partner on $14 billion El Paso data center Positive Sentiment: Some analysts remain bullish: Guggenheim reaffirmed a Buy rating with an $800 price target, while a Seeking Alpha analysis cited a normalized operating margin of roughly 36.8% after excluding legal and severance charges. Meta Platforms Q2: The Market Sells, I Buy The Dip Neutral Sentiment: Meta forecast third-quarter revenue of $61 billion to $64 billion, broadly around but slightly below the $63.2 billion consensus midpoint. No EPS outlook was provided in the reported guidance. Zuckerberg also promoted open AI development and opposed restrictions on Chinese AI models, positions that may support innovation but could attract regulatory scrutiny. Zuckerberg says Meta’s enterprise AI opportunity extends beyond agents Negative Sentiment: Second-quarter EPS fell to $6.18, missing estimates near $7.1–$7.2 and declining from $7.14 a year earlier. Results were pressured by approximately $2.4 billion of legal costs and $1.2 billion of severance expenses. Meta misses profit expectations, sticks to massive AI spending Negative Sentiment: Meta plans to spend approximately $130 billion to $145 billion on AI and data-center infrastructure this year, with the minimum raised by $5 billion. Investors fear the spending will compress margins and free cash flow before a direct AI revenue stream is proven. Meta shares tumble as AI spending stuns Wall Street Negative Sentiment: COO Javier Olivan sold shares under a pre-arranged Rule 10b5-1 plan, reducing his holdings in two transactions. Because the sales were scheduled, they are a limited bearish signal but may reinforce investor caution. SEC insider transaction filing Meta Platforms Company Profile (Free Report)
Meta Platforms, Inc (NASDAQ: META), formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta’s core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
Featured Articles Five stocks we like better than Meta Platforms Why SK hynix Could Be the Best AI Chip Stock to Buy Now Seagate Technology Stock Surges as Earnings Beat Silences AI Doubters Alphabet Is Down 18% From Its High After a Stellar Quarter—Overdone, or More Downside Ahead? Why Bloom Energy May Be the Most Important AI Infrastructure Stock Want to see what other hedge funds are holding META? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Meta Platforms, Inc. (NASDAQ:META – Free Report).
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Meta stock fell as much as 10% after hours on Wednesday as weaker profit, falling cash flow and heavy AI spending overshadowed record revenue.
The decline could erase well over $100 billion in market value if it holds when regular US trading begins on Thursday.
Second-quarter revenue rose 28% to $60.8 billion, but net income fell 14% to $15.9 billion. Earnings of $6.18 a share missed the $7.19 FactSet consensus.
The reaction exposed a widening divide.
Meta’s advertising machine remains powerful, but Wall Street increasingly wants proof that spending on data centres, models and computing capacity will create profitable businesses beyond ads.
Meta’s core operation did not collapse, as advertising revenue increased 27% to $59.4 billion as ad impressions rose 14% and the average price per advertisement climbed 12%.
Daily users across its family of apps reached 3.6 billion.
The problem was the cost of delivering that growth. Quarterly expenses surged 55% to $42 billion, including $2.4 billion of legal charges and $1.2 billion of severance expenses.
Free cash flow dropped 91% to only $784 million, weakening one of the strongest traditional arguments for owning Meta.
The company narrowed its 2026 capital-spending forecast to $130 billion-$145 billion from $125 billion-$145 billion, effectively raising the floor.
Third-quarter revenue guidance of $61 billion-$64 billion implies growth of about 22% at the midpoint, a clear slowdown from the June quarter.
D.A. Davidson analyst Gil Luria retained a Buy rating but cut his price target to $700 from $850.
MarketWatch reported that he called the outlook a “significant top-line deceleration”, showing that even bullish analysts are lowering expectations.
Why RBC thinks Wall Street may be missing the bigger storyRBC Capital Markets analyst Brad Erickson offers the contrarian case.
In a July note published before the results, he described Meta as the “biggest opportunity for narrative improvement” among hyperscalers.
Erickson argued that investors were concentrating on infrastructure costs while assigning too little value to subscription products, services for small businesses, custom chips and the potential Meta Compute business.
Selling excess computing capacity could create a new revenue stream, while paid AI services and business agents could reduce Meta’s dependence on advertising.
He said commentary around custom chips and Meta Compute could produce a significant narrative shift.
However, he also warned that management must provide concrete metrics, clear use cases and a credible timetable for scaling those businesses before sentiment improves.
That condition matters as Meta still generated about 98% of its quarterly revenue from advertising, leaving the emerging AI opportunities commercially interesting but financially unproven.
Analysts said Meta must demonstrate that its AI investments can generate meaningful revenue, rebuild free cash flow as exceptional costs ease, and create new businesses capable of supporting annual capital expenditure of up to $145 billion.
The S&P/ASX Small Ordinaries Index (XSO) edged 3.7 points, or 0.11%, higher on Wednesday to close at 3,326.50, although the benchmark remains 44.5 points, or 1.32%, lower over the past five trading sessions.
Meanwhile, quarterly season is in full swing as several more explorers and developers outline drilling programs, stronger operating plans and major project milestones across gold and critical minerals assets. You can read about the following and more throughout the day.
Novo prepares Tibooburra drilling Novo Resources Corp (TSX:NVO, OTCQX:NSRPF, ASX:NVO, FRA:1NOR) is preparing to begin a 2,700-metre reverse circulation drilling program at the Tibooburra Gold Project in New South Wales during late September quarter 2026, subject to regulatory and landholder approvals.
The program will include about 1,700 metres at the Clone prospect and 1,000 metres at Pioneer South.
Novo will also continue regional stream sediment sampling, mapping and surface sampling during the second half of 2026 to identify new gold anomalies, expand its exploration pipeline and prioritise targets for future drilling.
Pantoro outlines FY27 growth plans Pantoro Gold Ltd (ASX:PNR, OTC:PNTOF, FRA:RKN) produced 18,028 ounces of gold from its Norseman operation in Western Australia during the June quarter, with 16,366 ounces sold at an average price of A$6,293 per ounce.
Quarterly all-in sustaining costs were A$4,107 per ounce, generating EBITDA of A$44.8 million.
Drilling continued to confirm high-grade extensions at the Scotia underground mine, while development and production rates improved at the OK mine following Redpath Australia’s appointment as principal contractor.
Pantoro has also approved Stage 3 of the Gladstone open pit, extending planned mining at the centre to August 2028.
The company expects to produce between 90,000 and 105,000 ounces in FY2027 at an AISC of A$2,800 to A$3,400 per ounce.
Sovereign advances Kasiya development case Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) highlighted the completion of a definitive feasibility study for the Kasiya Critical Minerals Project in Malawi.
The study delivered a pre-tax net present value of US$2.2 billion against capital expenditure to first production of US$727 million.
Kasiya is forecast to generate steady-state annual EBITDA of US$476 million and pre-tax free cash flow of US$452 million over an initial 25-year mine life.
The project is positioned to become the world’s largest producer of natural rutile and natural flake graphite, with planned annual output of 222,000 tonnes and 275,000 tonnes respectively.
Sovereign is also assessing the potential to recover a heavy rare earth concentrate as a by-product, which was not included in the feasibility study economics.
Titan targets Dynasty resource upgrade Titan Minerals Ltd (ASX:TTM, OTC:TTTNF) continued resource expansion and conversion drilling at its Dynasty Gold Project in southern Ecuador during the quarter.
Three diamond rigs completed 2,395 metres of drilling at the Cerro Verde prospect, alongside 1,045 metres at the Gissell porphyry copper target.
Dynasty currently hosts a mineral resource of 65.55 million tonnes grading 1.85 g/t gold and 12.38 g/t silver for 3.9 million ounces of gold and 26.1 million ounces of silver.
Titan is targeting a resource upgrade in the March quarter of 2027, with recent trenching results identifying additional near-surface and strike-extension targets for drilling during 2026.
Mateřská společnost Facebooku Meta Platforms zveřejnila hospodářské výsledky za druhé čtvrtletí roku 2026. Výnosy překonaly odhady analytiků, zisk na akcii však meziročně klesl mimo jiné kvůli jednorázovým nákladům na právní spory a propouštění. Firma zároveň zveřejnila výhled výnosů na třetí čtvrtletí, který trh vnímá jako zklamání, a zvýšila spodní hranici celoročního výhledu kapitálových výdajů i celkových nákladů.
Výsledky společnosti Meta Platforms (META) za 2Q 2026 2Q 2026 Konsensus 2Q 2026 2Q 2025 Výnosy (mld. USD) 60,80 60,24 47,52 Čistý zisk (mld. USD) 15,85 -- 18,34 Zisk na akcii (EPS, USD/akcie) 6,18 -- 7,14 Výsledky za 2Q Výnosy meziročně vzrostly o 28 % na 60,80 mld. USD, nad odhadem 60,24 mld. USD.
Reklamní výnosy dosáhly 59,36 mld. USD, meziročně +27 %, nad odhadem 59,07 mld. USD. Ostatní výnosy vzrostly meziročně o 73 % na 1,01 mld. USD, nad odhadem 863,3 mil. USD.
Výnosy segmentu Family of Apps činily 60,37 mld. USD, meziročně +28 %, nad odhadem 59,77 mld. USD. Výnosy segmentu Reality Labs dosáhly 431 mil. USD, meziročně +16 %, nad odhadem 428,7 mil. USD.
Provozní zisk klesl meziročně o 8,2 % na 18,78 mld. USD. Provozní zisk segmentu Family of Apps dosáhl 23,39 mld. USD, meziročně -6,3 %, pod odhadem 26,11 mld. USD. Provozní ztráta segmentu Reality Labs činila 4,62 mld. USD oproti ztrátě 4,53 mld. USD ve stejném období loňského roku, hůře než odhadovaná ztráta 4,45 mld. USD.
Provozní marže dosáhla 31 % oproti 43 % ve stejném období loňského roku.
Zisk na akcii klesl meziročně na 6,18 USD z 7,14 USD, a to především vlivem nákladů ve výši 2,40 mld. USD souvisejících s právními spory a 1,18 mld. USD na odstupné v souvislosti s květnovým snižováním počtu zaměstnanců.
Počet zobrazených reklam vzrostl meziročně o 14 % (odhad: +14,6 %), po +11 % ve stejném období loňského roku. Průměrná cena za reklamu vzrostla meziročně o 12 % (odhad: +11,7 %), po +9 % v loňském roce.
Průměrný počet denních aktivních uživatelů napříč aplikacemi Meta (Family DAP) dosáhl 3,60 mld., meziročně +3,4 %, mírně pod odhadem 3,61 mld.
Počet zaměstnanců k 30. červnu 2026 dosáhl 75 472, meziročně -1 %.
Výhled na 3Q 2026 Společnost pro třetí čtvrtletí roku 2026 očekává:
Výnosy 61 až 64 mld. USD (konsensus: 63,17 mld. USD). Výhled na FY 2026 Firma zvýšila spodní hranici výhledu pro celý rok 2026 a nyní očekává:
Kapitálové výdaje 130 až 145 mld. USD (dříve: 125 až 145 mld. USD; konsensus: 135,86 mld. USD). Celkové náklady 165 až 169 mld. USD (dříve: 162 až 169 mld. USD; konsensus: 163,02 mld. USD). Společnost zároveň uvedla, že i nadále očekává, že provozní zisk za celý rok 2026 překoná úroveň roku 2025. Zvýšený výhled nákladů zahrnuje již zmíněné náklady 2,40 mld. USD na právní spory. Firma dále upozornila, že pokračuje kontrola v oblasti ochrany mládeže na několika trzích a že řada souvisejících soudních sporů plánovaných v USA na letošní rok by mohla vyústit ve významnou finanční ztrátu.
Komentář vedení Mark Zuckerberg, zakladatel a generální ředitel Meta, uvedl: „AI dnes akceleruje náš klíčový byznys, pohání naši další generaci produktů a otevírá dveře zcela novým podnikatelským příležitostem. Výsledky se již projevují a jsem optimistický ohledně potenciálu, který před námi stojí.“
Návrat kapitálu akcionářům Společnost za čtvrtletí vyplatila na dividendách a jejich ekvivalentech 1,35 mld. USD. Ke zpětným odkupům akcií ve druhém čtvrtletí nedošlo.
Komentář analytiků Analytici z RBC Capital Markets (doporučení outperform, cílová cena 810 USD) uvedli, že výnosy za 2Q byly o 1 % nad odhadem trhu, avšak mírně pod úrovní 29–30 % očekávanou částí investorů, a zisk na akcii zaostal kvůli vyšším nákladům na právní spory a jednorázovým nákladům na odstupné.
Analytici z Evercore ISI (doporučení outperform, cílová cena 930 USD) označili výsledky za velmi solidní, přičemž Meta zůstává zdaleka nejrychleji rostoucí reklamní platformou daného rozsahu v internetovém sektoru.
Analytici z Vital Knowledge hodnotili report jako neutrální, s tím, že dynamika kapitálových výdajů a cash flow nebyla tak špatná, jak se obávalo, a ponechání výhledu kapitálových výdajů zhruba beze změny je mírně pozitivní signál. Střed výhledu výnosů na 3Q je podle nich jen nepatrně pod konsensem.
Analytici z Emarketer uvedli, že silný růst výnosů Meta bude opět zastíněn projekcemi kapitálových výdajů, a i když firma výhled nezvýšila, investoři budou nadále tlačit na více informací o plánech na potenciální cloudový/computingový byznys a monetizaci AI.
Akcie Meta Platforms Akcie Meta Platforms (META) po uzavření trhu klesají o 8,83 % na 533,89 USD.
Akcie Meta Platforms Inc (META) včera klesly o 1,3 % na 585,61 USD Ukazatel Ukazatel Kapitalizace (mld. USD) 1486,5 P/E 17,3 Vývoj za letošní rok (%) -11,3 Očekávané P/E 15,5 52týdenní minimum (USD) 520,3 Prům. cílová cena (USD) 787,4 52týdenní maximum (USD) 796,3 Dividendový výnos (%) 0,4 Zdroj: Meta Platforms, Bloomberg
Brent Thill, Senior Internet Analyst at Jefferies, says Meta still has "more gas in the tank" when it comes to revenue growth. He reiterates his buy rating on the stock, arguing that it is "not an expensive name" and expects the company to change the narrative over the next year.
For the quarter ended June 2026, Meta Platforms (META - Free Report) reported revenue of $60.8 billion, up 28% over the same period last year. EPS came in at $6.18, compared to $7.14 in the year-ago quarter.
The reported revenue compares to the Zacks Consensus Estimate of $60.21 billion, representing a surprise of +0.98%. The company delivered an EPS surprise of -12.96%, with the consensus EPS estimate being $7.10.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Meta Platforms performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Family daily active people (DAP): $3.60 billion compared to the $3.61 billion average estimate based on four analysts.Headcount: 75,472 versus 75,407 estimated by three analysts on average.Advertising Revenue- US & Canada: $26.34 billion compared to the $26.03 billion average estimate based on four analysts. The reported number represents a change of +31.4% year over year.Advertising Revenue- Rest of the World: $8.09 billion compared to the $8.16 billion average estimate based on three analysts. The reported number represents a change of +34.8% year over year.Geographical Revenue by User- US & Canada: $26.82 billion compared to the $25.57 billion average estimate based on three analysts. The reported number represents a change of +31.6% year over year.Advertising Revenue- Europe: $14.09 billion versus the three-analyst average estimate of $14.47 billion. The reported number represents a year-over-year change of +23.9%.Geographical Revenue by User- Asia-Pacific: $11.16 billion versus $11.68 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +19.2% change.Geographical Revenue by User- Rest of World: $8.53 billion versus the three-analyst average estimate of $8.55 billion. The reported number represents a year-over-year change of +36.5%.Revenue- Family of Apps (FoA): $60.37 billion versus $59.6 billion estimated by eight analysts on average. Compared to the year-ago quarter, this number represents a +28.1% change.Revenue- Advertising: $59.36 billion compared to the $59.03 billion average estimate based on eight analysts. The reported number represents a change of +27.5% year over year.Revenue- Other: $1.01 billion versus $860.24 million estimated by seven analysts on average. Compared to the year-ago quarter, this number represents a +72.7% change.Revenue- Reality Labs: $431 million compared to the $441.53 million average estimate based on seven analysts. The reported number represents a change of +16.5% year over year.View all Key Company Metrics for Meta Platforms here>>>
Shares of Meta Platforms have returned +5.4% over the past month versus the Zacks S&P 500 composite's +1.9% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Social media giant Meta Platforms (META -1.31%) reported second-quarter results after the market closed Wednesday, and shares fell about 6% in after-hours trading as of this writing.
Revenue rose 28% year over year to $60.8 billion, and the advertising business behind it grew on both volume and pricing. The concern, however, sits further down the cash flow statement. Meta generated $31.9 billion in cash from operations during the quarter -- and kept just $784 million of it as free cash flow.
Nearly everything else went into the company's build-out of AI (artificial intelligence) infrastructure.
Here's a closer look at where the money went, and what it means for shareholders.
Image source: Getty Images.
Free cash flow is operating cash flow minus capital expenditures, and Meta's capital expenditures for the quarter came to about $31.1 billion. That breaks down as $30.1 billion in purchases of property and equipment plus $962 million in principal payments on finance leases. Subtract all of it from $31.9 billion of operating cash flow, and $784 million is what remains. For perspective, Meta's free cash flow in the year-ago quarter was $8.5 billion.
And the spending is stepping up fast. Meta's capital expenditures were $19.8 billion in the first quarter, up more than 50% from the prior quarter.
Cash from operations, meanwhile, barely moved, coming in at $32.2 billion in Q1 and $31.9 billion in Q2. The operating side held steady. The spending is what changed, taking free cash flow from $12.4 billion in the first quarter to less than $1 billion in the second.
So what is the money buying? Data centers, mostly. When management raised its capital expenditure outlook in April (to a range of $125 billion to $145 billion, from $115 billion to $135 billion), it attributed the increase to "higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity." In other words, part of the bill isn't even new capacity. It's inflation in the parts that go into it.
Wednesday's report pushed the number higher again. Meta now expects 2026 capital expenditures of $130 billion to $145 billion, raising the low end of the range by $5 billion. That's the second time the range has moved up this year.
I'd argue the guidance matters more than the quarter itself. Meta has spent about $50.9 billion through June, so even the bottom of the new range implies roughly $40 billion of spending per quarter for the rest of the year. That's more than the company just spent in Q2, and more than a full quarter of its operating cash flow. If cash from operations holds near recent levels, free cash flow could turn negative in the second half.
Of course, the income statement felt some strain, too. Net income fell 14% year over year to $15.8 billion, and earnings per share declined 13% to $6.18. Additionally, management nudged its full-year expense outlook higher to $165 billion to $169 billion, with $2.4 billion of legal charges accounting for the increase.
Today's Change
(
-1.31
%) $
-7.80
Current Price
$
585.61
Is the stock a buy after this drop? For all the spending, the business it's meant to feed looks healthy. Ad impressions rose 14% year over year in the second quarter, and the average price per ad climbed 12%. And Meta's apps reached 3.60 billion daily active people in June, up 3% from a year ago.
With that said, revenue growth did decelerate, from 33% in the first quarter to 28%. But for a company generating more than $60 billion in quarterly revenue, 28% is a remarkable pace.
The balance sheet holds up its end as well. Meta ended June with $90.3 billion in cash and marketable securities -- a war chest that removes any doubt about whether the company can afford its build-out. What the market doubts is the return on it.
That doubt won't be settled this year. What investors can evaluate now is the price. After the after-hours drop, shares trade at about 20 times earnings (below the S&P 500's multiple of about 28), which is arguably a modest price for a business growing revenue 28% year over year.
Overall, I like the stock here. A business compounding at this rate rarely trades below the market's multiple, and the cash pile means the spending doesn't threaten the balance sheet. Sure, free cash flow may sit near zero for a few quarters, and it could even go negative. But I can live with that while the advertising numbers hold up this well. Of course, if revenue growth cools sharply while the spending range climbs again, I'd revisit.
Meta CEO Mark Zuckerberg. Bloomberg/Getty Images Meta's AI strategy is, once again, worrying investors.
The social media giant's stock tumbled 10% on Wednesday after it disclosed that its capital expenditure growth far outpaced revenue growth.
Meta has a core problem: much of this spending doesn't yet have a financial return. About 98% of Meta's revenue still comes from its traditional ads business, according to its second-quarter results.
Meta has been trying lots of new things lately, like rolling out new subscriptions, smart glasses, and apps. It's also weighing selling AI compute to other companies. All these moves leave its actual AI strategy unclear, EMARKETER senior analyst Minda Smiley said.
"These continuous rollouts increasingly feel more like the company is throwing spaghetti at the wall instead of rallying around a sustainable way forward," she wrote in a note.
A Meta spokesperson told Business Insider that Meta's AI investments supercharge its business by helping teams build faster and customers advertise better. For example, 9 million small businesses use Meta's AI image-editing tools. Also, since adding its latest AI model, Muse Spark, the company has seen a 60% increase in the number of people interacting with its AI assistant each day, the spokesperson added.
On the earnings call, CEO Mark Zuckerberg also made the case that it's still early in Meta's AI journey. He said that Meta is working on significantly more powerful AI models that will drive future revenue growth, and touted Meta's most recent AI model releases, which performed well on industry rankings.
Zuckerberg predicted a future where billions of people use personal AI agents operating 24/7 to improve their personal lives and careers, although he said that Meta hasn't quite made that a reality yet.
Wall Street's patience is wearing thin. Thomas Monteiro, a senior analyst at Investing.com, said in a note that Meta's ads revenue — which is still growing at a healthy clip — won't make up for all the AI spending.
"The harder truth is that even strong ads are not enough considering the expenses outlook," he wrote.
It's still far too early to count Meta out. On the earnings call, Zuckerberg stressed that he didn't view Meta as just an ads business. He cited Meta's long history of building its own technology, from creating Facebook in his Harvard dorm room to building data centers now.
"We really are a full-stack technology company," he said.
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Charles Rollet is BI's tech correspondent in San Francisco. Prior to joining BI, Charles worked at TechCrunch covering startups and VC. Charles is based in the Bay Area, where he enjoys hiking with his dogs. You can contact Charles securely on Signal at charlesrollet.12 or +1-628-282-2811.
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Meta’s AI Spending Problem Just Found a BlackRock SolutionMeta Platforms NASDAQ: META reported second-quarter 2026 revenue growth of 28% as the company said artificial intelligence initiatives improved content recommendations, advertising performance and product development, while it continued to accelerate spending on data centers and other AI infrastructure.
Chief Executive Officer Mark Zuckerberg said 3.6 billion people used at least one Meta app daily during the quarter. Instagram reached 2 billion daily active users, while Threads surpassed 500 million monthly active users, according to Zuckerberg. WhatsApp reached a record of 30 million messages per second during the World Cup final.
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Revenue growth driven by ads and engagement A $1.5 Billion Wake-Up Call for Every AI Company on Wall StreetChief Financial Officer Susan Li said total revenue rose 28% year over year to $60.8 billion, or 27% on a constant-currency basis. Family of Apps revenue increased 28% to $60.4 billion, including $59.4 billion in advertising revenue, up 27%.
Ad impressions across Meta’s services increased 14%, supported by engagement and user growth as well as ad-load optimization. Average price per ad rose 12%, which Li attributed to gains in ad performance, improved macroeconomic conditions compared with the prior-year quarter and currency tailwinds.
Meta Earnings Put AI Spending and Ad Growth Back in FocusFamily of Apps other revenue reached $1 billion for the first time, rising 73% from a year earlier, primarily because of WhatsApp paid messaging and subscriptions. Reality Labs revenue increased 16% to $431 million, as growth in AI glasses revenue more than offset lower Quest headset sales.
Meta said recommendation improvements contributed to stronger engagement. Global time spent on Instagram grew at a double-digit rate, while Facebook video time spent rose 9% globally and more than 10% in the U.S. and Canada. Li said the company is increasingly using large language models to understand content, improve ranking systems and generate better training data.
Meta processed every public Reels and Feed post on Instagram through an LLM earlier this year, Li said. Its largest Reels ranking release to date generated a 15-basis-point increase in Instagram sessions, with strength in reshares and time spent. The company is extending the approach to Feed, where early results appear comparable, she said.
AI tools support advertising and new businesses Zuckerberg said AI investments are improving ad relevance and conversions on Facebook and Instagram. Meta has also expanded adoption of AI creative tools, with 9 million small businesses now using at least one such tool.
Li said Meta’s AI-powered Advantage+ end-to-end advertising offerings reached an annual revenue run rate of more than $75 billion during the quarter. The company also introduced Meta Generative Recommender, which uses LLMs to assess ad content and user preferences together rather than scoring possible ads individually.
Early pilots using LLMs to better understand user preferences produced a 1% increase in app-event conversions on Instagram, Li said. Other ad-ranking advances contributed to an 8.3% increase in ad clicks and a 15.7% increase in conversions on Facebook.
Beyond advertising, Meta is building consumer, business and enterprise AI offerings. Zuckerberg said Meta Business Agent became available globally on WhatsApp and Messenger during the quarter and now serves more than 1 million businesses each week for customer conversations or sales. The company has begun rolling business agents out on Instagram.
Meta also released Muse Spark 1.1 and Muse Image through its Meta Superintelligence Labs. Since rebuilding Meta AI and integrating Muse Spark, the number of people interacting daily with the assistant has increased 60%, Zuckerberg said. Muse Spark 1.1 is available through a public API, with broader distribution channels and enterprise features planned.
Zuckerberg said Meta views personal AI agents, business agents, APIs, productivity tools and potential direct compute sales as major future opportunities. He said the company has received offers to buy compute capacity at a “meaningful premium” to what Meta paid, but believes selling intelligence built on top of compute could carry higher margins.
Expenses and infrastructure investment rise Second-quarter expenses increased 55% year over year to $42 billion. The total included $2.4 billion in legal-proceeding charges and $1.2 billion in severance costs related to Meta’s May 2026 headcount reduction.
Operating income declined 8% to $18.8 billion, producing a 31% operating margin. Excluding the legal and severance charges, operating income would have increased 9% from a year earlier, Li said. Net income was $15.8 billion, or $6.18 per share.
Capital expenditures, including principal payments on finance leases, totaled $31.1 billion, driven by spending on servers, data centers and network infrastructure. Free cash flow was $784 million. Meta ended the quarter with $90.3 billion in cash and marketable securities and $83.7 billion in debt.
The company had more than 75,000 employees at quarter-end, down 3% from the first quarter. That figure included about 8,000 employees affected by the May workforce reduction, most of whom are expected to no longer be included in headcount by the end of the third quarter.
Meta announced a strategic venture with BlackRock to develop a 1-gigawatt data center in El Paso, Texas. Li said the company’s capacity planning is focused on maximizing available capacity in 2026 and 2027, while retaining flexibility for server investment decisions in 2028 and beyond.
Outlook Meta forecast third-quarter total revenue of $61 billion to $64 billion. The company expects foreign exchange to be an approximately 1% headwind to year-over-year revenue growth based on current exchange rates.
For 2026, Meta raised the lower end of its total expense outlook and now expects expenses of $165 billion to $169 billion, including the legal charge recognized in the second quarter. It maintained its expectation that full-year operating income will exceed 2025 operating income.
Meta narrowed its 2026 capital-expenditure outlook to $130 billion to $145 billion, from a previous range of $125 billion to $145 billion. The company expects its tax rate for the remaining quarters of 2026 to be between 15% and 17%.
About Meta Platforms (NASDAQ:META)Meta Platforms, Inc NASDAQ: META, formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.
Meta's core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Hello, this is Priyanka Salve, writing to you from Singapore.
Welcome to the latest edition of "Inside India" — your one-stop destination for stories and developments from the world's fastest-growing large economy.
The success of Gen Z protests in India has handed a surprise victory to Mark Zuckerberg's Meta, cementing its position as the most influential social media company in the world's largest democracy. But with great power comes greater government scrutiny.
This week I explore how Meta's growing clout could be a double-edged sword for the company.
Any thoughts on today's newsletter? Share them with the team.
The big storyThe Gen Z protests that rocked India last week and forced Prime Minister Narendra Modi's government to act on its demands have marked the rise of two new political influencers in the world's largest democracy.
One is the Cockroach Janta Party, a viral, social media-led youth movement that organized the protests. The second is Mark Zuckerberg's short-form video app Instagram, which was widely used by protesters to raise their concerns with the government and to record clashes with authorities.
The appeal of the app among youth became even more evident when Modi made his first selfie-style Instagram video on July 23, in a bid to reach out to Gen Zs. It raked in a record 300 million-plus views within 24 hours and is nearing 400 million now. Modi has since made more videos and even directed his ministers to build their presence on Instagram.
As per data from digital intelligence provider Sensor Tower, Meta's WhatsApp had an average of 837 million daily active users in India, Instagram 501 million and Facebook 362 million so far this year. On the other hand, Google's YouTube had 646 million, and Elon Musk's X had 15 million, making Meta the dominant social media company in India.
But this growing influence of Meta also exposes it to greater government scrutiny around content moderation, competition, privacy, and digital payments, experts said, adding the U.S. social media company faces similar probes in Europe and America.
The Indian government earlier this month issued a stern warning to Instagram to remove child abuse ads on its platform that followed a warning to WhatsApp over the rollout of a username feature.
Local media also reported Tuesday that the information technology ministry had summoned Meta's global policy heads over concerns about its "non-compliance with the Information Technology Rules, and the prevalence of deepfakes on platforms like Instagram and Facebook."
The ministry was also miffed after access to Modi's selfie-styled video was briefly restricted on Facebook, as per reports. India's IT secretary expressed the government's displeasure at Meta, calling the action "disturbing" in an interview with news agency ANI.
Social media's growing influence puts the government in a paradoxical situation where it wants to tighten compliance of these apps but is also deeply reliant on them for engaging with millions of Indians, experts told CNBC.
Growing influence"Instagram's growing prominence, particularly among younger users and as a platform for public discourse, reinforces Meta's dominant position in India's digital ecosystem," Rohit Kulkarni, managing director and senior analyst covering internet and capital markets at Roth Capital Partners, told CNBC.
Between July 18 and July 26, when the protests were at their height, the average daily active users on Instagram jumped 16% year-on-year to 531 million, according to Sensor Tower. During this period, Instagram's daily active users increased by 2.6%, while those for Facebook, YouTube, and WhatsApp remained largely flat.
"Content consumption" via Instagram spiked in the last couple of weeks, Ujjwal Chaudhry, a partner at Analysys Mason, told CNBC, adding that as political parties embrace the platform, it will lead to further adoption across older age groups and further cement Meta's dominance in the country.
India's internet and smartphone user base is second only to China, which more than a decade ago banned American social media and messaging apps, leading to the rise of local players such as WeChat, Weibo and Douyin. American internet giants lost complete access to hundreds of millions of users and major advertising and data revenue.
In sharp contrast, several attempts have been made by Indian entrepreneurs to create homegrown social media challengers, but they have had little success. So, the Indian market, with one of the largest youth populations, holds significant promise for U.S. big tech companies such as Meta, experts said.
Meta has "raced ahead" and "is unparalleled" when it comes to social commerce, communication, and ad targeting in India, Neil Shah, vice president of research at Counterpoint Research, told CNBC. Internet behemoth Google, on the other hand, has a strong presence in web display or Android in-app advertisements.
"The trust and credibility that influencers provide on these [Meta's] platforms carry strong weight because targeting is highly algorithmic and personalized," he said.
Greater engagement will lead to advertising growth for Meta, and Instagram has been extremely successful in attracting digital ad spends in India, experts said. But the country does not make a material contribution to Meta's top line due to lower per-user revenue as compared to North America and Europe, they added.
"India represents one of Meta's largest long-term monetization opportunities," said Kulkarni of Roth Capital, as it is "strategically" far more important to Meta today than it is financially, he said.
That makes the company vulnerable to state action, as its platforms drive tough conversations, taking on the role of online public squares of sorts that amplify anti-government voices.
Meta did not respond to CNBC's request for comments.
Need to knowU.S. to see higher generic drug prices thanks to tariffs, Dr. Reddy's CEO warns
U.S. President Donald Trump's proposed tariffs on generic drugs will increase the price of these medicines for patients in the country, Erez Israeli, the chief executive of Indian drugmaker Dr. Reddy's Laboratories, told CNBC's 'Inside India'.
How India's Gen Z forced Modi to listen, respond and act
Prime Minister Narendra Modi's government caved under the pressure of student protests across India — a rarity in the current administration — underscoring the rising influence of Gen Zs in the world's largest democracy. On Saturday, India's Education Minister Dharmendra Pradhan resigned, a key demand of the student protesters who were voicing concerns over examination test paper leaks.
Temasek-owned Manipal Hospital to raise over $1 billion in IPO
Temasek-owned Manipal Hospital is planning to raise 97.05 billion rupees ($1 billion) via an initial public offering of shares. The issue will consist of a primary fundraise of over 80 billion rupees. The IPO opened on Wednesday and will close on Friday.
Coming up
July 31: Manipal Hospital IPO closes.
Aug 5: Reserve Bank of India monetary policy decision.
A day after blasting OpenAI and Anthropic for hoarding information, the drama surrounding Meta’s Q2 earnings call centered around how he would follow up. Listeners didn’t have to wait long for the answer.
“It’s extremely unlikely, if you look out five years from now, that you don’t have billions of people with a personal agent that understands your goals,” Meta CEO Mark Zuckerberg said on the company’s second quarter earnings call Wednesday (July 29), describing software “working on your behalf 24/7” across health, finances, relationships and careers.
That vision, for every one of Meta’s 3.6 billion daily users to have an assistant that never clocks out dominated Meta’s earnings call. Zuckerberg spent his opening remarks describing a future where personal agents handle everything from health to finances, and the rest of the call built directly on that premise: how Meta pays for it, what stands in the way, and why the company believes it will win anyway.
The vision runs into a hard constraint almost immediately: supply. “There’s just nowhere near enough compute for all the demand,” Zuckerberg said, explaining that Meta is fielding offers to sell its own capacity at a premium but prefers to build intelligence on top of it instead, where the margins run higher.
That scarcity is why Meta is racing to stand up the agent layer now, even in pieces. Meta Superintelligence Labs shipped its Muse Spark 1.1 and Muse Image models this quarter, and daily interactions with the Meta AI assistant have climbed sharply since it’s rebuild. Business agents are already live for more than a million businesses on WhatsApp and Messenger, handling customer inquiries and completed sales without a person in the loop.
Zuckerberg pointed to Brazilian rental company Movida as the model he wants to replicate: a WhatsApp agent that runs the entire booking flow start to finish, resolving the vast majority of conversations without human help. That is the pattern Meta is betting will scale to billions of people next.
Zuckerberg’s Case for Why Meta Wins the AI Bet Scarce compute raises an obvious question: Why should Meta, rather than a rival, end up owning this? Zuckerberg’s answer rests on distribution and the flywheel it creates. “When we have a product and a format that works, I would go as far as to say that I think we’re probably the best company in the world at scaling those experiences to billions of people,” he said, describing how usage data feeds back into the models that improve the products.
He did not pretend the wager was small. “I get that this is a big investment and it’s a big bet,” Zuckerberg said. “My personal bet is that the people who invest in this are going to be rewarded and feel very good over time.”
That confidence is the thesis the entire call built toward: an ad business strong enough to fund an all-in push into personal agents, aimed at a future Zuckerberg is convinced is coming regardless of who builds it.
What Else Stood Out Meta hired Kunal Shah, founder of Indian payments company CRED, as its new head of WhatsApp. Zuckerberg said Shah built one of India’s largest payment companies. Instagram reached 2 billion daily active users. Threads crossed 500 million monthly actives, which Zuckerberg called the fastest-growing conversation app ever. WhatsApp peaked at 30 million messages sent per second during the World Cup final, an all-time record for the platform. AI-driven ranking improvements increased ad clicks and conversions across Meta’s platforms. Advantage+ automated campaigns continue to scale as a core part of ad delivery Meta launched Meta One, a new subscription offering more tools and AI features across its apps, with plans to add further tiers and pricing options Zuckerberg revealed that every public Reels and Feed post on Instagram is now automatically run through an LLM and analyzed across dimensions like topic and tone, a milestone the company hit this year. Topline Growth and Future Outlook Meta reported total revenue of $60.8 billion for the quarter, up 28% year over year, with advertising revenue of $59.4 billion, up 27%. Ad impressions grew 14% and the average price per ad rose 12%. Family of apps other revenue crossed $1 billion for the first time, up 73%.
Capital expenditures for the quarter reached $31.1 billion, while free cash flow came in at $784 million. Meta ended the quarter with $90.3 billion in cash and marketable securities against $83.7 billion in debt, and headcount stood at roughly 75,000, down 3%, reflecting about 8,000 employees affected by May’s reduction.
Looking ahead, Meta guided to third-quarter 2026 revenue of $61 billion to $64 billion, full-year 2026 expenses of $165 billion to $169 billion, and full-year 2026 capital expenditures of $130 billion to $145 billion, with the floor raised from its prior outlook.
The company did not provide specific guidance for 2027 capex.
As Meta gobbles up land to construct massive AI data centers, CEO Mark Zuckerberg says there's a balancing act when it comes to deciding whether to sell excess capacity or to preserve it.
Among the four major U.S. hyperscalers, Meta is the only one that doesn't have a business selling cloud infrastructure and services even though its capital expenditures rival that of its peers. But in recent months, Zuckerberg has been floating the possibility of launching a cloud business as a way to take advantage of its capacity stockpile in a resource-constrained market.
As CNBC reported earlier this month, Anthropic is in preliminary talks to lease computing power from Meta.
"We're getting a lot of offers for compute at a significant premium over what we paid for it," Zuckerberg said on the company's second-quarter earnings call after the bell on Wednesday. "And we have more coding and productivity tools on our roadmap as well."
Zuckerberg's comments came after Meta issued a weaker-than-expected revenue forecast for the third quarter and said free cash flow dwindled by 90% from a year earlier due to soaring capex. The stock sank more than 7% in after-hours trading, extending a slump that's pushed it down 11% for the year as of Wednesday's close.
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In the report, Meta bumped up the low end of its 2026 capital expenditure guidance by $5 billion, bringing the range to between $130 billion and $145 billion. Last week, Alphabet hiked the top end of its guidance to $205 billion and turned cash flow negative for the first time. And Microsoft said in its earnings report on Wednesday that capex for the year will be roughly $175 billion. Amazon reports results on Thursday.
Investors have been seeking details on Zuckerberg's AI strategy, which has been scattershot and left Meta behind OpenAI, Anthropic and Google in the market for top models and services.
"I think everyone wants clarity into what he wants to do in the compute business," Brent Thill, an analyst at Jefferies, told CNBC's "Closing Bell Overtime."
Considering the trade-offZuckerberg offered little by way of specifics on his plans, but he spelled out some of the various considerations at play.
"In terms of running the business, obviously, a common trade-off that we need to make is around how much do you monetize something today versus develop future assets," Zuckerberg said. "I think that it's always a portfolio."
He said that in looking at a potential enterprise business, it's not just about selling capacity. The company also has API and productivity services it can offer as well as AI agents that it's building, Zuckerberg said.
"And I think that there's just a very, very large opportunity there," he said.
However, Meta needs ample compute capacity to satisfy its own AI ambitions, especially as the company begins aggressively rolling out new models under the leadership of AI chief Alexandr Wang. Earlier this month, Meta debuted the Muse Spark 1.1 model, which Wang said represents the "strongest model for agentic and coding work yet" and at a cheaper price than offerings from OpenAI and Anthropic.
"It would be foolish to basically just sell all of the compute and take a short-term profit," Zuckerberg said.
Zuckerberg acknowledged that jumping into the enterprise, where Meta has historically struggled, will require some hard work, and that the company has to learn how to do it. While he didn't reference hiring a sales force, it will be an essential move if Meta is serious about selling to businesses big and small.
"That's going to be somewhat a new muscle that we build as a company," Zuckerberg said. "But I think it's a very important one that we build."
Dave Brown, a former longtime senior executive at Amazon Web Services, is set to join the company, CNBC recently confirmed.
A big challenge for Zuckerberg as he tries to sell Wall Street on his vision is his spotty track record. Zuckerberg's most notable whiff was the metaverse, and his effort starting in 2021 to reshape the company around a futuristic digital world.
That project is still costing Meta billions of dollars a quarter. Meta's Reality Labs, which develops virtual reality devices and wearables, lost $4.62 billion in the latest period on just $431 million of revenue.
Still, Meta is desperate to diversify its business beyond digital ads, which still account for 98% of the company's revenue, and to show that it can be an influential player in AI.
Zuckerberg is all-in.
"I get that this is sort of a big bet across the industry," Zuckerberg said. "My personal bet is that the people who invest in this are going to be rewarded and feel very good over time."
WATCH: Jefferies' Brent Thill: Meta report was 'trifecta' of things that could go wrong.
Meta Platforms (NASDAQ:META | META Price Prediction) shares tumbled in after-hours trading on Wednesday, July 29, after the social media giant delivered a rare profit miss, with the stock falling as much as roughly 10% at the low. Shares closed the after hours session with a 7.45% decline at $542.00. Applied to CEO Mark Zuckerberg’s roughly 13.1% to 13.6% ownership, the market-value drop translates to an estimated $15 billion paper loss on his stake.
A Revenue Beat, a Profit Miss Meta reported Q2 revenue of $60.8 billion, up 27.96% year over year, edging past consensus of roughly $60.29 billion. Diluted EPS of $6.18 missed the $7.22 consensus by 14.42%, snapping a six-quarter streak of EPS beats.
Net income slid to $15.848 billion, down 13.57%, while operating income fell 8.15% and operating margin compressed to 31% from 43%. Total costs and expenses spiked 55% to $42.03 billion, including $2.40 billion in legal charges and $1.18 billion in severance tied to an 8,000-employee headcount reduction in May 2026. Free cash flow collapsed to $784 million, down 91.31% from $8.55 billion a year earlier.
The AI Capex Question The core business remained strong. Advertising revenue climbed 27% to $59.36 billion, Family of Apps daily active people reached 3.60 billion, up 3%, and average price per ad rose 12%. What rattled investors was the price tag on Meta’s AI buildout. Full-year capex guidance was narrowed to $130 billion to $145 billion, with the majority earmarked for AI infrastructure, and total expense guidance was raised to $165 billion to $169 billion. Long-term debt was raised to $83.66 billion to fund the buildout. Q3 revenue guidance of $61 billion to $64 billion was widely characterized as lackluster.
Zuckerberg Defends the Bet Meta entered the report already under pressure, with shares down 11.13% year to date and 16.07% over the past year. The 52-week range stands at $520.26 to $796.25.
In the release, Zuckerberg said, “AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities. The results are already showing, and I’m optimistic about the potential ahead.” He has separately told The New York Times that AI discourse is “overwhelmingly filled with doom.” Bloomberg characterized the earnings call as Zuckerberg “defending AI bets to skeptical investors.”
Reddit sentiment on r/stocks slid to 33 (bearish) immediately after the release, while r/investing held at 69 (bullish lean), capturing the split between traders reacting to the miss and longer-term holders eyeing the entry point. The Q2 report fits a broader earnings-season pattern in which AI infrastructure spending is unsettling investors even at companies posting robust top-line growth.
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.
CEO Mark Zuckerberg said that global time spent on Instagram grew by double digits year over year this quarter. Beata Zawrzel/NurPhoto via Getty Images If you can't seem to get off your Instagram scroll, it is not an accident.
During Meta's second-quarter earnings call on Wednesday, CEO Mark Zuckerberg said that global time spent on Instagram grew by double digits year over year this quarter, "largely driven by improvements to our feed and Reels recommendations."
"Our recommendations are also becoming more personalized, surfacing more fresh content while giving people more direct control over what they see," Zuckerberg said, adding that Instagram reels combined "faster inference with a new architecture that draws on deeper user history to improve predictions."
"This drove a 15 basis point increase in sessions on Instagram, with particular strength in reshares and time spent, which are both strong indicators of better content-to-user matching," Zuckerberg added.
According to Zuckerberg, recommendations are trained through automatically feeding every public Reel and post on Instagram to an LLM and analyzing them for topics and tone, which he called "a key building block toward greater personalization."
"And we're working towards including more surfaces on Facebook as well," Zuckerberg said.
Zuckerberg's comments came weeks after the company launched Muse Image in early July, which lets users create AI-generated images from photos on public Instagram accounts of people over 18. By default, eligible public accounts were included without prior notice, triggering a privacy backlash that led to the generation function being shut down in less than a week.
Users could prevent Meta's AI from accessing visual content by going to Instagram's Settings, opening the Share and Reuse section, and switching off the option that lets Meta access photos and videos. There was no such option for text, comments, or audio.
The algorithms have been central to multiple lawsuits filed by more than two dozen states that alleged that Meta designed its products to be addictive to teenagers and children.
During the call, Meta CFO Susan Li said the company expects continued "scrutiny on youth-related issues in several markets" and has "a number of youth-related trials scheduled for this year," which could result in financial losses. The company reported $2.40 billion of charges "related to legal proceedings."
Meta did not immediately respond to a request for comments.
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Ygal Arounian, Wedbush managing director, Internet equity research, reacts to Meta Platforms Inc.'s second-quarter earnings and disappointing earnings forecast on "Bloomberg The Close." -------- More on Bloomberg Television and Markets Like this video?
Meta Platforms, Inc. delivered strong operational metrics and revenue growth, despite an 8% post-earnings stock decline and mixed headline results. Q2 saw significant margin compression from higher R&D, legal, and severance costs; however, core business health and user growth remain robust. META's guidance for Q3 revenue is slightly below consensus, and elevated CapEx continues to pressure free cash flow, but monetization opportunities persist.
Meta Platforms (META - Free Report) came out with quarterly earnings of $6.18 per share, missing the Zacks Consensus Estimate of $7.1 per share. This compares to earnings of $7.14 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -12.96%. A quarter ago, it was expected that this social media company would post earnings of $6.71 per share when it actually produced earnings of $7.31, delivering a surprise of +8.94%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Meta Platforms, which belongs to the Zacks Internet - Software industry, posted revenues of $60.8 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.98%. This compares to year-ago revenues of $47.52 billion. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Meta Platforms shares have lost about 10.1% since the beginning of the year versus the S&P 500's gain of 8.5%.
What's Next for Meta Platforms?While Meta Platforms has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Meta Platforms was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $6.85 on $63.11 billion in revenues for the coming quarter and $32.99 on $253.5 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Autodesk (ADSK - Free Report) , has yet to report results for the quarter ended July 2026.
This design software company is expected to post quarterly earnings of $3.12 per share in its upcoming report, which represents a year-over-year change of +19.1%. The consensus EPS estimate for the quarter has been revised 0.2% lower over the last 30 days to the current level.
Autodesk's revenues are expected to be $2.01 billion, up 14% from the year-ago quarter.
Meta Platforms, Inc. remains a Strong Buy, with a $815 price target and nearly 50% upside from the post-earnings price. The core advertising engine is accelerating: revenue rose 28%, ad revenue 27%, impressions 14%, and average price per ad 12%. The 31% operating margin overstates the underlying deterioration. Excluding $3.58B of legal and severance charges, the estimated normalized margin was about 36.8%.
In June, Meta entered the enterprise AI market with a new AI agent aimed at businesses, to help with customer service, support, and other daily operations. But the tech giant’s enterprise AI ambitions are much more expansive, Meta CEO Mark Zuckerberg told investors on Wednesday’s second-quarter earnings call.
“We see a large enterprise opportunity to sell to businesses, including APIs, business agents, potentially selling compute directly, and other services that we’re building for large customers,” Zuckerberg said. These additions could potentially position the business to create new revenue streams beyond advertising, which drives the bulk of its business, and subscriptions, which contribute a smaller share.
Initially, the company will focus on the opportunity to serve its existing base of advertisers by offering AI agents that work across messaging apps and elsewhere. These allow businesses to interact with their own customers through an AI interface.
“And, just like the ad system, effectively, we will get paid when we deliver results for those businesses,” Zuckerberg said. “We view this as an extension of the sales and the partnerships that we have with many millions of advertisers and hundreds of millions of small businesses that use our platforms.”
He also fleshed out how Meta could expand beyond serving the small business customer that makes up much of its current advertiser base by offering Meta’s internal tools to external customers in the future.
“There are other enterprise customers who I think we’re increasingly going to serve, too,” Zuckerberg explained. “We’re building coding and developing and internal productivity tools partially because we need to build them ourselves, and we need to make sure that we have tools that are tuned for ourselves,” he continued. “Now that we have those, we feel like there’s a large opportunity to serve — whether that’s small businesses or larger businesses.”
This shift in focus may not come easy — Zuckerberg admitted that selling to the enterprise was a “different muscle” than the one Meta has historically flexed.
Meanwhile, in terms of Meta selling compute to enterprise customers, Meta is focused on balancing its need for revenue and its need to execute on its own future plans. That said, the company pointed out multiple times that it currently has the opportunity to sell compute at “a significant premium over what we paid for it.”
Still, Zuckerberg cautioned investors that it “would be foolish” to “sell all of the compute and take a short-term profit.” Instead, he described Meta’s approach as a “portfolio” that included a mix of long-term and short-term plans for its compute infrastructure. “As we get closer to personal superintelligence, we are . . . going to need hardware that allows you to seamlessly interact with it,” he noted.
The call also focused on Meta’s sizable ambitions around agentic AI — AI systems that can act on a person’s or business’ behalf, rather than just answer questions — which won’t only be offered to businesses.
Consumers, too, are being promised “personal AI agents,” as well as AI smart glasses that can interact with the world in front of them.
Plus, Meta is using AI technology — specifically, large language models — to more rapidly build out its suite of social apps. Recent launches on this front have included an app for Marketplace sellers, another for Facebook Groups, one for vibe-coded games, and other experiments. More are on the way, Zuckerberg teased.
“I expect it to become a lot easier to ship new apps,” said Zuckerberg. “So we are planning to build out more ideas and use our recommendation systems to scale them to the people who will find them interesting.”
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Meta Platforms reported a precipitous 91% drop in second-quarter free cash flow on Wednesday, underscoring the financial strain of the social media giant’s costly AI buildout despite an uncertain payoff.
The Facebook parent company reported free cash flow of $784 million in the second quarter ended June 30, down from $8.55 billion reported a year earlier, sending its shares down 10% in extended trading.
Meta’s cash flow wipeout echoed Alphabet’s, which last week said it was cash flow negative for the first time ever as it spent $5.9 billion in the second quarter. The rate of spending stunned even the most bullish of Wall Street investors, driving Alphabet’s stock down.
mark Zuckerberg’s Meta reported free cash flow of $784 million in the second quarter, down from $8.55 billion reported a year earlier, sending its shares down 10% in extended trading. Getty Images Meta’s revenue jumped 28% to $60.8 billion in the quarter, the quickest pace of growth since the fourth quarter of 2021, barring the first quarter of 2026.
“We expect that a significant portion of our compute is going to go towards training our models, growing our core business and delivering personal agents and new products, but we also expect to grow a large business serving large customers as well,” CEO Mark Zuckerberg said on an earnings call.
Meta currently has 32 data centers across the globe in operation or under construction, with 28 of them in the US.
The company also raised the lower end of its capital expenditure outlook. It now expects 2026 capital expenditure to be between $130 billion and $145 billion, compared with its prior forecast of $125 billion to $145 billion. At the beginning of the year it had forecast capex between $115 billion and $135 billion.
Meta now expects 2026 capital expenditure to be between $130 billion and $145 billion, compared with its prior forecast of $125 billion to $145 billion. A $10 billion data center complex under construction in El Paso, Texas. USA TODAY Network via Reuters Connect The feverish spending by Big Tech is expected to reach well above $700 billion this year, primarily on AI, while Morgan Stanley has pegged the estimated spend at more than $1 trillion for the next year.
“Meta’s report echoes what we saw from Alphabet and Tesla last week: strong revenue growth, but even faster growth in spending. The market is repricing a deteriorating free cash flow outlook, and in an environment of higher capital costs, that does not sit well,” said Thomas Monteiro, senior analyst at Investing.com.
. Construction on a $1 billion 520-acre Meta data center in Beaver Dam, Wisc. USA TODAY Network via Reuters Connect Luke Stillman, a managing director at research firm Madison and Wall, said: “Meta’s underlying ad business that’s financing everything though is still performing well and is our main focus.”
Meta’s legal troubles While investors are scrutinizing Meta’s AI spending, it faces legal risks related to its core business. The company said in a court filing this month that four states were seeking $1.4 trillion in penalties over accusations it designed its Facebook and Instagram platforms to addict young users and misled the public about their safety.
Meta had warned in April that legal and regulatory blowback in the European Union and the US over youth social media issues “could significantly impact” its business and financial results.
Meta had warned in April that legal and regulatory blowback in the European Union and the US over youth social media issues “could significantly impact” its business and financial results. The company said on Wednesday that it continued to see this scrutiny.
On the call, Meta CFO Susan Li said second-quarter operating income would have increased 9% year over year without the company’s legal charges and severance expenses. Operating income actually fell 8%.
“We continue to see scrutiny on youth-related issues in several markets and have a number of youth-related trials scheduled for this year in the US, which may ultimately result in a material loss,” she said in the company’s earnings statement.
Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) missed second-quarter profit estimates on Wednesday, weighed down by a jump in costs including legal charges, even as revenue grew faster than expected.
The social media giant reported earnings per share of $6.18, down 13% year-over-year and well below the $7.22 analysts had expected. Revenue came in at $60.8 billion, up 28% from a year earlier and ahead of the $60.17 billion consensus estimate.
Operating income fell 8% to $18.8 billion, missing the $21.5 billion estimate, as costs and expenses jumped 55% to $42 billion. Operating margin contracted 1,200 basis points to 31%. Net income dropped 14% to $15.8 billion. The results included $2.40 billion of legal proceeding charges recognized in the quarter.
Daily active people came in at 3.6 billion, up 3% year-over-year but just shy of the 3.61 billion estimate.
Advertising revenue rose 27% to $59.4 billion, topping the $59.01 billion estimate, driven by a 14% increase in ad impressions and a 12% rise in average price per ad. Family of Apps revenue climbed 28% to $60.4 billion, with operating income of $23.4 billion for the segment.
Reality Labs revenue was $431 million, below the $441.5 million estimate, while the unit posted an operating loss of $4.62 billion, narrower than the roughly $5 billion loss analysts had forecast.
Meta raised its full-year 2026 capital expenditure guidance to a range of $130 billion to $145 billion, up from a prior forecast of $125 billion to $145 billion. Capital expenditure in the quarter totaled $31.08 billion, below the roughly $33.7 billion estimate.
For the third quarter, Meta guided revenue of $61 billion to $64 billion, versus a $63.15 billion estimate. Full-year 2026 expenses are now expected to be $165 billion to $169 billion, raised to account for the second-quarter legal charges. The company said full-year operating income would remain above the 2025 level, and raised its expected remaining tax rate for the year to a range of 15% to 17%, from a prior 13% to 16%.
Headcount stood at 75,472, down 1% year-over-year.
Operating cash flow was $31.9 billion and free cash flow was $784 million. The company paid $1.35 billion in dividends and equivalents during the quarter and held $90.26 billion in cash, equivalents and marketable securities. Long-term debt stood at $83.66 billion.
"AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities," said Meta CEO Mark Zuckerberg. "The results are already showing, and I'm optimistic about the potential ahead."
Shares of Meta fell around 6.7% in after-hours trading following the results.
, /PRNewswire/ -- Meta Platforms, Inc. (Nasdaq: META) today reported financial results for the quarter ended June 30, 2026.
"AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities," said Mark Zuckerberg, Meta founder and CEO. "The results are already showing, and I'm optimistic about the potential ahead."
Second Quarter 2026 Financial Highlights
Three Months Ended June 30,
% Change
In millions, except percentages and per share amounts
2026
2025
Revenue
$ 60,801
$ 47,516
28 %
Costs and expenses
42,026
27,075
55 %
Income from operations
$ 18,775
$ 20,441
(8) %
Operating margin
31 %
43 %
Provision for income taxes
$ 2,908
$ 2,197
32 %
Effective tax rate
16 %
11 %
Net income
$ 15,848
$ 18,337
(14) %
Diluted earnings per share (EPS)
$ 6.18
$ 7.14
(13) %
Second Quarter 2026 Operational and Other Financial Highlights
Family daily active people (DAP) – DAP was 3.60 billion on average for June 2026, an increase of 3% year-over-year.
Ad impressions – Ad impressions delivered across our Family of Apps increased by 14% year-over-year.
Average price per ad – Average price per ad increased by 12% year-over-year.
Revenue – Revenue was $60.80 billion, an increase of 28% year-over-year. Revenue on a constant currency basis would have increased by 27% year-over-year.
Costs and expenses – Total costs and expenses were $42.03 billion, an increase of 55% year-over-year. This includes $2.40 billion of charges related to legal proceedings and $1.18 billion of severance expenses in connection with the May 2026 headcount reduction.
Capital expenditures – Capital expenditures, including principal payments on finance leases, were $31.08 billion. Capital return program – Dividend and dividend equivalent payments were $1.35 billion.
Cash, cash equivalents, and marketable securities – Cash, cash equivalents, and marketable securities were $90.26 billion as of June 30, 2026. Long-term debt – Long-term debt was $83.66 billion as of June 30, 2026.
Cash flow – Cash flow from operating activities was $31.86 billion, and free cash flow was $784 million.(1)
Headcount – Headcount was 75,472 as of June 30, 2026, a decrease of 1% year-over-year. Our reported headcount includes approximately 8,000 employees impacted by the May 2026 headcount reduction, the majority of whom will no longer be reflected in our headcount by the end of the third quarter of 2026. ____________________________________
(1) For more information on our free cash flow non-GAAP financial measure, see the sections entitled "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Results" in this press release.
CFO Outlook Commentary
We expect third quarter 2026 total revenue to be in the range of $61-64 billion. Our guidance assumes foreign currency is an approximately 1% headwind to year-over-year total revenue growth, based on current exchange rates.
We are raising the lower-end of our expense outlook to incorporate the $2.4 billion charges related to legal proceedings recognized in the second quarter. We now expect full year 2026 total expenses to be in the range of $165-169 billion.
We continue to expect to deliver operating income this year that is above 2025 operating income.
We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $130-145 billion, narrowed from our prior outlook of $125-145 billion.
Absent any changes to our tax landscape, we expect our tax rate for the remaining quarters of 2026 to be between 15-17%, an increase from our prior outlook of 13-16%.
Finally, we continue to monitor active legal and regulatory matters that could significantly impact our business and financial results. For example, we continue to see scrutiny on youth-related issues in several markets and have a number of youth-related trials scheduled for this year in the U.S., which may ultimately result in a material loss.
Webcast and Conference Call Information
Meta will host a conference call to discuss its results at 1:30 p.m. PT / 4:30 p.m. ET today. The live webcast of the call can be accessed at the Meta Investor Relations website at investor.atmeta.com, along with the company's earnings press release, financial tables, and slide presentation.
Following the call, a replay will be available at the same website. Transcripts of conference calls with publishing equity research analysts held today will also be posted to the investor.atmeta.com website.
Disclosure Information
Meta uses the investor.atmeta.com and meta.com/news websites as well as Mark Zuckerberg's Facebook profile (facebook.com/zuck), Instagram account (instagram.com/zuck) and Threads profile (threads.net/zuck) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Meta
Meta is building the future of human connection, powered by artificial intelligence and immersive technologies. When Facebook launched in 2004, it changed the way people connect. Apps like Messenger, Instagram, and WhatsApp further empowered billions around the world. Now, Meta is moving beyond 2D screens toward experiences that foster deeper connections and unlock new possibilities.
Contacts
Investors:
Chad Heaton
[email protected] / investor.atmeta.com
Press:
Matt Tye
[email protected] / meta.com/news
Forward-Looking Statements
This press release contains forward-looking statements regarding our future business plans and expectations. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: the impact of macroeconomic conditions on our business and financial results, including as a result of geopolitical events; our ability to retain or increase users and engagement levels; our reliance on advertising revenue; our dependency on data signals and mobile operating systems, networks, and standards that we do not control; changes to the content or application of third-party policies that impact our advertising practices; risks associated with new products and changes to existing products as well as other new business initiatives, including our artificial intelligence initiatives and Reality Labs efforts; our emphasis on community growth and engagement and the user experience over short-term financial results; maintaining and enhancing our brand and reputation; our ongoing privacy, safety, security, and content and advertising review and enforcement efforts; competition; risks associated with government actions that could restrict access to our products or impair our ability to sell advertising in certain countries; litigation and government inquiries; privacy, legislative, and regulatory concerns or developments; risks associated with acquisitions; security breaches; our ability to manage our scale and geographically-dispersed operations; and market conditions or other factors affecting capital return to stockholders. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption "Risk Factors" in our Quarterly Report on Form 10-Q filed with the SEC on April 30, 2026, which is available on our Investor Relations website at investor.atmeta.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. In addition, please note that the date of this press release is July 29, 2026, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.
For a discussion of limitations in the measurement of certain of our community metrics, see the section entitled "Limitations of Key Metrics and Other Data" in our most recent quarterly or annual report filed with the SEC.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: revenue excluding foreign exchange effect, advertising revenue excluding foreign exchange effect, and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.
We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.
Our non-GAAP financial measures are adjusted for the following items:
Foreign exchange effect on revenue. To calculate revenue on a constant currency basis, we translate current period revenue using the prior year's monthly exchange rates for our settlement or billing currencies other than the U.S. dollar, which we believe is a useful metric that facilitates comparison to our historical performance.
Purchases of property and equipment; Principal payments on finance leases. We subtract both purchases of property and equipment, and principal payments on finance leases in our calculation of free cash flow because we believe that these two items collectively represent the amount of property and equipment we need to procure to support our business, regardless of whether we procure such property or equipment with a finance lease. We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business. Free cash flow is not intended to represent our residual cash flow available for discretionary expenditures.
For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, see the "Reconciliation of GAAP to Non-GAAP Results" table in this press release.
META PLATFORMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share amounts)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue
$ 60,801
$ 47,516
$ 117,111
$ 89,830
Costs and expenses:
Cost of revenue
11,330
8,491
21,549
16,063
Research and development
21,656
12,942
39,354
25,092
Marketing and sales
3,431
2,979
6,339
5,735
General and administrative (1)
5,609
2,663
8,222
4,943
Total costs and expenses
42,026
27,075
75,464
51,833
Income from operations
18,775
20,441
41,647
37,997
Interest and other income (expense), net
(19)
93
(1,139)
919
Income before income taxes
18,756
20,534
40,508
38,916
Provision (benefit) for income taxes
2,908
2,197
(2,113)
3,935
Net income
$ 15,848
$ 18,337
$ 42,621
$ 34,981
Earnings per share:
Basic
$ 6.23
$ 7.28
$ 16.79
$ 13.87
Diluted
$ 6.18
$ 7.14
$ 16.62
$ 13.56
Weighted-average shares used to compute earnings per share:
Basic
2,543
2,518
2,538
2,522
Diluted
2,566
2,570
2,565
2,580
____________________________________
(1) The second quarter 2026 general and administrative expenses include $2.40 billion of charges related to legal proceedings.
META PLATFORMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
June 30, 2026
December 31,
2025
Assets
Current assets:
Cash and cash equivalents
$ 15,462
$ 35,873
Marketable securities
74,798
45,719
Accounts receivable, net
21,752
19,769
Prepaid expenses and other current assets
13,463
7,361
Total current assets
125,475
108,722
Non-marketable equity investments
30,157
27,524
Property and equipment, net
225,724
176,400
Operating lease right-of-use assets
23,985
20,404
Goodwill
23,406
24,534
Other assets
21,209
8,437
Total assets
$ 449,956
$ 366,021
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$ 15,889
$ 8,894
Operating lease liabilities, current
2,425
2,213
Accrued expenses and other current liabilities
38,065
30,729
Total current liabilities
56,379
41,836
Operating lease liabilities, non-current
26,229
22,940
Long-term debt
83,664
58,744
Long-term income taxes
18,326
21,005
Other liabilities
4,137
4,253
Total liabilities
188,735
148,778
Commitments and contingencies
Stockholders' equity:
Common stock and additional paid-in capital
103,981
95,793
Accumulated other comprehensive income (loss)
(603)
271
Retained earnings
157,843
121,179
Total stockholders' equity
261,221
217,243
Total liabilities and stockholders' equity
$ 449,956
$ 366,021
META PLATFORMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Cash flows from operating activities
Net income
$ 15,848
$ 18,337
$ 42,621
$ 34,981
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization
6,356
4,342
12,355
8,242
Share-based compensation
7,658
4,834
13,690
8,981
Deferred income taxes
1,445
(1,170)
1,568
(2,163)
Unrealized loss on equity investments
111
455
1,185
320
Other
(56)
(280)
(73)
(376)
Changes in assets and liabilities:
Accounts receivable
(4,401)
(1,338)
(2,273)
1,466
Prepaid expenses and other current assets
(807)
326
(3,230)
686
Other assets
(1,454)
(190)
(2,535)
(242)
Accounts payable
584
460
(354)
(574)
Accrued expenses and other current liabilities
5,933
(1,107)
5,662
(3,338)
Other liabilities
645
892
(4,528)
1,604
Net cash provided by operating activities
31,862
25,561
64,088
49,587
Cash flows from investing activities
Purchases of property and equipment
(30,116)
(16,538)
(49,113)
(29,479)
Purchases of marketable securities
(42,615)
(7,746)
(75,592)
(19,509)
Sales and maturities of marketable securities
24,860
14,273
44,036
19,057
Purchases of non-marketable equity investments
(1,126)
(15,114)
(1,670)
(15,214)
Payments for held-for-sale assets
(556)
(775)
(674)
(775)
Acquisitions of businesses and intangible assets
(101)
(61)
(474)
(62)
Other investing activities
1
3
156
14
Net cash used in investing activities
(49,653)
(25,958)
(83,331)
(45,968)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards
(4,281)
(4,110)
(8,704)
(8,993)
Repurchases of Class A common stock
—
(10,167)
—
(22,921)
Payments for dividends and dividend equivalents
(1,353)
(1,327)
(2,699)
(2,656)
Proceeds from issuance of long-term debt, net
24,910
—
24,910
—
Principal payments on finance leases
(962)
(474)
(1,805)
(1,225)
Other financing activities
(2,347)
101
(2,288)
323
Net cash provided by (used in) financing activities
15,967
(15,977)
9,414
(35,472)
Effect of exchange rate changes on cash, cash equivalents, restricted
cash, and restricted cash equivalents
(7)
131
—
243
Net decrease in cash, cash equivalents, restricted cash, and restricted
cash equivalents
(1,831)
(16,243)
(9,829)
(31,610)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at
beginning of the period
31,102
30,071
39,100
45,438
Cash, cash equivalents, restricted cash, and restricted cash
equivalents at end of the period
$ 29,271
$ 13,828
$ 29,271
$ 13,828
Reconciliation of cash, cash equivalents, restricted cash, and
restricted cash equivalents to the condensed consolidated balance
sheets
Cash and cash equivalents
$ 15,462
$ 12,005
$ 15,462
$ 12,005
Restricted cash and restricted cash equivalents, included in prepaid
expenses and other current assets
702
161
702
161
Restricted cash and restricted cash equivalents, included in other
assets
13,107
1,662
13,107
1,662
Total cash, cash equivalents, restricted cash, and restricted cash
equivalents
$ 29,271
$ 13,828
$ 29,271
$ 13,828
Supplemental cash flow data
Cash paid for income taxes, net
$ 1,458
$ 5,096
$ 1,999
$ 5,544
Segment Results
We report our financial results for our two reportable segments: Family of Apps (FoA) and Reality Labs (RL). FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services. RL includes our virtual and augmented reality related consumer hardware, software, and content.
The following table sets forth our segment information of revenue and income (loss) from operations:
Segment Information
(In millions)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
Revenue:
Advertising
$ 59,363
$ 46,563
$ 114,387
$ 87,955
Other revenue
1,007
583
1,891
1,093
Family of Apps
60,370
47,146
116,278
89,048
Reality Labs
431
370
833
782
Total revenue
$ 60,801
$ 47,516
$ 117,111
$ 89,830
Income (loss) from operations:
Family of Apps
$ 23,394
$ 24,971
$ 50,294
$ 46,736
Reality Labs
(4,619)
(4,530)
(8,647)
(8,739)
Total income from operations
$ 18,775
$ 20,441
$ 41,647
$ 37,997
Reconciliation of GAAP to Non-GAAP Results
(In millions, except percentages)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2026
2025
2026
2025
GAAP revenue
$ 60,801
$ 47,516
$ 117,111
$ 89,830
Foreign exchange effect on 2026 revenue using 2025 rates
A man walks by a Meta store in Burlingame, at the San Francisco Bay Area, California, U.S., May 19, 2026. REUTERS/Carlos Barria Purchase Licensing Rights, opens new tab
July 29 (Reuters) - Meta Platforms (META.O), opens new tab reported a precipitous 91% drop in free cash flow on Wednesday, underscoring the financial strain of the social media giant's costly AI buildout despite an uncertain payoff.
The Facebook parent company reported free cash flow of $784 million in the second quarter, down from $8.55 billion reported a year earlier.
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Shares of the company fell about 5% in extended trading.
Meta also raised the lower end of its capital expenditure and total expenses outlooks. It now expects 2026 capital expenditure to be between $130 billion and $145 billion, compared with its prior forecast of $125 billion to $145 billion.
It expects full-year 2026 total expenses to be in the range of $165 billion to $169 billion, compared with its prior forecast of $162 billion to $169 billion. The company said this incorporates $2.4 billion in charges related to legal proceedings recognized in the second quarter.
Meta's cash flow wipeout echoed Alphabet's, which last week said it was cash flow negative for the first time ever as it spent $5.9 billion in the second quarter. The rate of spending stunned even the most bullish of Wall Street investors, driving Alphabet's stock down.
"Meta is investing everything into AI capacity, and that's what has investors spooked every time earnings are announced. Meta only narrowed the low end of capex guidance this time, but they're already spending extremely aggressively as a percent of revenue," said Luke Stillman, a managing director at research firm Madison and Wall.
"The underlying ad business that's financing everything though is still performing well and is our main focus," he added.
The feverish spending by Big Tech is expected to reach well above $700 billion this year, primarily on AI, while Morgan Stanley has pegged the estimated spend at more than $1 trillion for the next year.
Reporting by Katie Paul in New York and Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar and Nia Williams
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Jaspreet Singh joined Reuters as a technology reporter in April 2023. He covers a raft of developments including deals, layoffs, management changes, quarterly earnings and the latest in the world of AI. He is interested in stories that bring to light any corporate misconduct, abuse of power and innovation. Jaspreet graduated from Panjab University with a degree in Journalism. If you have any sensitive information or a tip to share, contact him for an off-the-record introduction chat. He will explain what it means to speak with a reporter on background.
Meta's Reality Labs unit, which develops virtual reality devices and wearables powered by AI, lost $4.62 billion in the latest quarter.
In its second-quarter earnings report on Wednesday, Meta said Reality Labs generated revenue of $431 million, up from $370 million a year earlier, while its operating loss widened from $4.53 billion a year ago. Analysts polled by StreetAccount were expecting a second-quarter loss of $5.07 billion on revenue of $423.4 million.
Reality Labs builds the Quest-branded VR headsets and Ray-Ban Meta glasses. The division has generated over $80 billion in total operating losses since late 2020.
Meta CEO Mark Zuckerberg changed Facebook's name to Meta in 2021, underscoring his bet that people would live, work and play in digital worlds. However, the VR market failed to catch on with consumers, resulting in Meta refocusing Reality Labs to devices like the Ray-Ban Meta glasses it develops with eyewear giant EssilorLuxottica.
WATCH: Microsoft and Meta set to report earnings after the bell.
Meta Platforms META shares are slipping in extended hours on Wednesday as investors react to a messy Q2 earnings release that reignited aggressive spending fears.
The giant’s revenue reached $60.80 billion – up a better-than-expected 28% year-on-year – but its per-share profit at $6.18 failed to meet consensus estimates.
Net income came under pressure as surging AI infrastructure outlays and higher operating expense eroded operating margins.
The post-earnings sell-off adds pressure to META stock that was already down 10% heading into the quarterly print.
The primary catalyst behind Meta’s earnings squeeze was a massive 55% year-over-year AI-driven increase in overall costs, which swelled to $42.03 billion in the second quarter.
Depreciation fees tied to newly operational data center clusters, elevated server component prices, and higher compensation packages required to retain top-tier AI engineering talent weighed on the firm’s operating margin, which came in at 31%.
EPS was also dragged down by $2.40 billion in legal charges tied to ongoing privacy litigation and $1.18 billion in accrued severance expenses following May’s corporate restructuring.
Together, these operational overheads tempered an otherwise “healthy” 14% quarterly increase in ad impressions and a 12% pop in average price per ad.
Compounding margin concerns, Meta’s forward-looking outlook provided cold comfort to growth-focused investors.
Management now expects revenue to fall between $60 billion and $63 billion in fiscal Q3, landing below Wall Street’s consensus estimate of $63.5 billion.
CFO Susan Li highlighted macroeconomic uncertainty in the international ad market and potential FX headwinds as factors dampening near-term monetization velocity.
Despite solid engagement metrics across Facebook, Instagram, and Threads, experts noted that AI-driven monetization tools like generative ad creation and recommendation engines are not ramping up quickly enough to offset the structural decay in legacy digital display yields.
Finally, management’s decision to lift the bottom end of its full-year capital expenditure guidance is what triggered a sell-off in Meta shares after-hours.
META now projects 2026 capex to range between $130 billion and $145 billion – raising the floor from its previous range of $125 billion to $145 billion after spending $31.08 billion in Q2 alone.
The firm’s chief executive Mark Zuckerberg defended the aggressive outlays, insisting that building world-class compute clusters is necessary to train next-generation Llama models.
However, with free cash flow contracting and hyper-scale data center commitments stretching out through 2028, Meta Platforms Inc is taking a direct hit as the market refuses to bankroll an unending infrastructure sinkhole without immediate, tangible returns.
Heading into the Q2 earnings release, Wall Street, however, had a consensus Strong Buy rating on Meta stock with a mean price target of about $824.
Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) missed second-quarter profit estimates on Wednesday, weighed down by a jump in costs including legal charges, even as revenue grew faster than expected.
The social media giant reported earnings per share of $6.18, down 13% year-over-year and well below the $7.22 analysts had expected. Revenue came in at $60.8 billion, up 28% from a year earlier and ahead of the $60.17 billion consensus estimate.
Operating income fell 8% to $18.8 billion, missing the $21.5 billion estimate, as costs and expenses jumped 55% to $42 billion. Operating margin contracted 1,200 basis points to 31%. Net income dropped 14% to $15.8 billion. The results included $2.40 billion of legal proceeding charges recognized in the quarter.
Daily active people came in at 3.6 billion, up 3% year-over-year but just shy of the 3.61 billion estimate.
Advertising revenue rose 27% to $59.4 billion, topping the $59.01 billion estimate, driven by a 14% increase in ad impressions and a 12% rise in average price per ad. Family of Apps revenue climbed 28% to $60.4 billion, with operating income of $23.4 billion for the segment.
Reality Labs revenue was $431 million, below the $441.5 million estimate, while the unit posted an operating loss of $4.62 billion, narrower than the roughly $5 billion loss analysts had forecast.
Meta raised its full-year 2026 capital expenditure guidance to a range of $130 billion to $145 billion, up from a prior forecast of $125 billion to $145 billion. Capital expenditure in the quarter totaled $31.08 billion, below the roughly $33.7 billion estimate.
For the third quarter, Meta guided revenue of $61 billion to $64 billion, versus a $63.15 billion estimate. Full-year 2026 expenses are now expected to be $165 billion to $169 billion, raised to account for the second-quarter legal charges. The company said full-year operating income would remain above the 2025 level, and raised its expected remaining tax rate for the year to a range of 15% to 17%, from a prior 13% to 16%.
Headcount stood at 75,472, down 1% year-over-year.
Operating cash flow was $31.9 billion and free cash flow was $784 million. The company paid $1.35 billion in dividends and equivalents during the quarter and held $90.26 billion in cash, equivalents and marketable securities. Long-term debt stood at $83.66 billion.
"AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities," said Meta CEO Mark Zuckerberg. "The results are already showing, and I'm optimistic about the potential ahead."
Shares of Meta fell around 6.7% in after-hours trading following the results.
Meta shares plunged more than 8% in the after market as it said it plans to invest between $130 billion and $145 billion on AI this year.
The parent of Facebook, Instagram and WhatsApp also missed Wall Street’s Q2 earnings per share forecast and anticipated softer than expected revenue in the current third quarter.
Revenue in the June quarter, however, jumped 28% from the year before to $60.8 billion. That beat forecasts as advanced AI boosts Meta’s key digital advertising business that accounts for almost all of its sales. Ad impressions rose 14% across its family of apps and average price per ad increased 12%. But the big question investors have about Meta and others in the space is whether the onging massive spending on data centers and chips to build out AI capacity justifies the gains. Meta in particular is coming from behind trying to compete with OpenAI, Anthropic and Google.
On Tuesday, it announced a venture with BlackRock to build a $14 billion data center in El Paso, Texas.
“AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities,” said CEO Mark Zuckerberg. “The results are already showing, and I’m optimistic about the potential ahead. He’ll host a call at 4:30 ET to talk about the numbers.
The company had 3.6 million Daily Active People (DAP), its preferred user metric, for the three months ended in June.
The earnings hit shortly after a press conference by new Federal Reserve chief Kevin Warsh that spooked markets. The Fed left interest rates unchanged at its July policy meeting but Warsh said he wouldn’t hesitate to raise them if inflation continued to run ahead of the central bank’s 2% target. That could hit tech companies hard as they invest aggressively.
The Dow Jones Industrial Average fell over 1,000 points in its worst trading day of the year.
Sarah Kunst, Managing Director at Cleo Capital, argued in a CNBC interview on July 29 that Meta’s enormous AI infrastructure spending reflects Mark Zuckerberg’s personal conviction and is likely to continue despite investor pushback. In her view, Meta’s creative financing adjustments are largely optics, while the underlying capex commitment remains firmly intact.
Zuckerberg Is Prepared to Spend Through Wall Street’s Resistance “Zuck is back in his legacy metaverse era. He has a passion project. He is going to do what he wants to do, and the market is going to have to pull the reins hard if they want him to stop,” she told CNBC. She added that “he still wants to spend. He still thinks that he can kind of capex his way into a really interesting AI product, even though the rest of us maybe aren’t so sure.”
Meta Platforms (NASDAQ:META | META Price Prediction) raised its full-year 2026 capex forecast to $125-$145 billion, up from the initial $115-$135 billion range issued in January. Q1 capex hit $18.997 billion, and Reality Labs posted an operating loss of $4.03 billion. Zuckerberg’s Q1 shareholder letter promised the company is “on track to deliver personal superintelligence to billions of people.”
The BlackRock Deal Changes the Optics, Not the Spending Kunst pointed to Meta’s arrangement with BlackRock (NYSE:BLK), in which BlackRock takes majority ownership of a data center while Meta remains the key customer. She also flagged reports that Meta is considering selling excess compute capacity to companies like Anthropic. In her reading, “that shift is him saying, look, we understand that you don’t love this capex, and we are going to try to make it as less painful as possible, but we’re still going to be doing that spending.”
BlackRock reported a record AUM of $15.34 trillion in Q2 and has climbed 13.77% over the past month, partly driven by enthusiasm for hyperscaler infrastructure financing. Meta shares trade at $593.41, down 17.04% over the past year and 9.95% year to date.
Reddit Data Backs Investor Discomfort Kunst summed up the mood: “Investors are not loving this capex kind of race that’s happening. But we’re not seeing a huge sort of back away from it.” Reddit sentiment scores dropped to 26 on July 22, the lowest point in the two-week window, during peak earnings-week capex chatter.
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A widely shared r/stocks post noted Apple’s capex sits at 1.8% of revenue while Alphabet’s is 37.5%, sharpening the comparison to Meta’s trajectory. Yet Polymarket traders assign an 85.4% probability to Meta beating quarterly earnings today, and analysts have a consensus target of $824.68 vs Meta’s current price of $594.30, with 49 buy and 8 strong buy ratings against 0 sell ratings.
Why Microsoft May Be the Cleaner AI Infrastructure Bet Kunst sees a smoother risk profile in Microsoft (NASDAQ:MSFT). She noted that Microsoft trades more like software players and maintains valuable OpenAI exposure, adding that “Microsoft will probably make some money on it. The OpenAI exposure is nice. No matter what that company does.”
Microsoft’s capex is substantial. Q3 FY2026 spending reached $30.88 billion, and Satya Nadella said the company’s “AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.“ Polymarket traders assign a 94.5% probability to Microsoft beating earnings today, versus 85.4% for META. Microsoft trades at $393.35, down 22.63% over the past year, as the market reassesses hyperscaler valuations.
What to Watch Kunst’s message is clear: Meta’s creative financing is a softer wrapper around an unchanged AI spending trajectory. Investors should watch whether Q2 revenue lands within the company’s $58-$61 billion guidance, whether Reality Labs losses widen, and whether Zuckerberg raises the capex ceiling again on tonight’s call.
Meta trades at roughly 19x forward earnings, a discount to its historical valuation. That suggests investors are already pricing in significant capex pressure, but another spending increase could test how much patience the market has left.
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Landon Swan from @LikeFolio discusses expectations for Meta Platforms (META) ahead of the company's earnings release after Wednesday's closing bell. He touches on consumer demand data and says the company is “doing a lot right” to maintain its global audience through social media.
Meta CEO Mark Zuckerberg blasted the “centralization” of AI in the hands of a few powerful companies and voiced opposition to potential bans on Chinese AI models as he hailed open access to the new tech as a way to unlock prosperity.
Writing in a Wall Street Journal op-ed, Zuck said he is surprised by how much of the discourse around AI “is so filled with doom,” arguing that humans are “fortunate to live at an incredible moment in history.”
“I don’t understand why anyone who believes that AI will eliminate most jobs and much of humanity’s relevance would rush to build that future,” wrote Zuckerberg, in an apparent swipe at OpenAI and Anthropic execs who have warned of mass job displacement.
Meta CEO Mark Zuckerberg blasted the “centralization” of AI in the hands of a few powerful companies. Bloomberg via Getty Images “The notion that AI is so dangerous that the only safe path is an extreme concentration of power seems dangerous,” he added. “Historically, hoping that an absolute power will benevolently provide for humanity if sufficiently enlightened hasn’t led to safe or positive outcomes.”
The Trump administration is reportedly finalizing an executive order calling on tech giants to submit to a voluntary 30-day review period on new AI models after an OpenAI hacking incident and an ultra-powerful new Anthropic model raised cybersecurity concerns.
In an interview with the Journal, Zuckerberg acknowledged that “There are new issues that we need to think through,” but insisted that “distributing the technology seems like it is creating more value than harm by quite a margin on all these fronts.”
“I think saying, ‘Hey, we want to review stuff for’ – whatever it is – 30 or 60 days, it may not sound like that much,” he said. “But the field is moving so quickly, that actually is quite a meaningful amount of time.”
US government officials are reportedly also considering restricting American companies from accessing Chinese AI models, after a top White House tech official accused China’s Moonshot AI of stealing from Anthropic to help create its latest Kimi K3 release.
Meta CEO Mark Zuckerberg speaks at the Meta Connect event on Sept. 25, 2024. REUTERS On Tuesday, the FCC announced a new ban on Chinese humanoid robots over national security risks. The White House claimed “malign actors” could be using the robotic devices to “surveil Americans” or collect other data.
But Zuckerberg said he doubted “banning open-source models from different countries is going to be productive,” arguing that policymakers should instead focus on accelerating AI advancements at home.
The White House is reportedly finalizing an executive order for a voluntary 30-day review period on new AI models. REUTERS His company’s chief AI scientist, Shengjia Zhao, joined executives from Anthropic, OpenAI, Google and other top tech companies in a Tuesday letter urging the US government to help develop safeguards “needed to deliberately pace the frontier of automated AI development.”
Meta has leaned into its “superintelligence” efforts, a term it uses to describe AI that is smarter than humans – planning to spend as much as $145 billion this year to buy pricey memory chips and build massive data centers.
But Meta is still trailing behind OpenAI and Anthropic’s dominant ChatGPT and Claude bots – and federal restrictions on new AI model launches could potentially keep Zuck behind his rivals.
The company laid off 8,000 employees in May as part of a cost-cutting initiative related to its AI spending, but Meta later announced plans to launch a workforce training program for people to build out data centers.
Meta has leaned full-force into its “superintelligence” efforts, a term it uses to describe AI that is smarter than humans. REUTERS “So far, I think that all the work around AI has net created a lot of jobs because there’s all this infrastructure that needs to get created,” Zuckerberg said. “So that concern hasn’t exactly played out the way that people feared it might.”
That’s consistent with arguments from other AI proponents, who say the new tech might temporarily displace workers, but it will also create new jobs in the long-term.
Since 2023, when AI first emerged as a driving force in layoffs, the new tech has been cited in 173,568 job cut announcements, according to a June report from Challenger, Gray & Christmas. So far this year, it has repeatedly come in as the leading reason for layoffs.
The labor market has remained surprisingly resilient this year amid shocks from President Trump’s tariffs and the war in Iran – though the pace of hiring has slowed and the number of long-term unemployed people remains high, particularly impacting early-career workers.
Meta is owned by Mark Zuckerberg. Dominika Zarzycka/SOPA Images/Shutterstock Zuckerberg argued that AI’s impact on the job market is again related to its availability, arguing that if the tech is made widely accessible, “then I believe we will see more jobs in the future, not fewer,” particularly more entrepreneurs starting their own small businesses.
News Corp, which owns The Post and The Wall Street Journal, has a content partnership with Meta.
Matt Maher talks about his expectations for Meta Platform's (META) earnings. He says what works most for Meta is their power in advertising, backed by AI implementation behind its advertising tech.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) is expected to post second-quarter results above Wall Street expectations, with analysts pointing to healthy advertising demand and early returns from artificial intelligence investment even as investors press the company for clearer evidence its AI spending will pay off.
Bank of America expects Meta to report revenue of $60.6 billion and earnings per share of $7.50, above consensus of $60.2 billion and $7.18, citing healthy ad growth and potential upside from May's workforce reductions. Investors are expected to focus on AI initiatives during the call, including advertising improvements tied to AI model integration, Muse Spark, and potential external compute sales.
For the third quarter, the bank expects Meta to guide revenue to $60.5 billion to $63.5 billion, roughly 18% to 24% growth year over year.
On costs, analysts said Meta could trim the top end of its expense guidance by $1 billion to $2 billion following the layoffs, while potentially raising its capital expenditure outlook to $135 billion to $150 billion, up from $125 billion to $145 billion, on higher memory costs.
Bank of America also raised its 2027 revenue estimate by $5 billion on potential AI capacity benefits following reports of a possible compute deal with Anthropic, now projecting $316 billion in 2027 revenue and $35.00 in earnings per share.
The results arrive amid broader investor unease over AI spending across Big Tech. Wedbush Securities said investors are focused on whether heavy AI infrastructure investment will translate into stronger revenue growth, rather than questioning the long-term outlook.
"We are going through another 'gut check' few weeks ahead for the tech trade as tech investors await a very important Q2 earnings season in July to further validate the AI Revolution buildout," Wedbush wrote, adding that Meta, Microsoft, Alphabet, Amazon, Nvidia, Oracle and Palantir have all come under pressure as investors question when elevated capex will generate returns. The firm called it an "air pocket stage," with roughly $700 billion in Big Tech capex this year fueling the buildout ahead of broader enterprise adoption.
Bank of America separately noted Meta shares have fallen roughly 24% since its third-quarter 2025 call, when the company guided to a step-up in 2026 spending, versus a 5% gain for the Nasdaq. The bank said Meta's compute demand is structural, with AI already improving ad targeting, though the market remains uncertain how quickly newer bets like subscriptions and business agents will monetize. Analysts expect more clarity over the next two earnings cycles.
Meta reports second-quarter results after markets close tonight.
Meta is scheduled to report second-quarter results after the close of regular trading on Wednesday.
Here's what Wall Street is expecting, according to estimates from analysts polled by LSEG:
Earnings per share: $7.22 adjustedRevenue: $60.17 billionMeta is projected to show revenue growth of 26% from $47.52 billion in the same period a year ago, as the company's core advertising business continues to benefit from advancements in artificial intelligence.
While Meta's digital ad business remains healthy, the company is trying to show that it can compete directly in the market for AI models and services, where OpenAI, Anthropic and Google have big leads.
On the earnings call, investors will be listening closely to what Meta CEO Mark Zuckerberg has to say about the company's efforts to more directly monetize its various AI-related efforts. Earlier this month, Meta debuted the Muse Spark 1.1 model, which AI chief Alexandr Wang said represents the "strongest model for agentic and coding work yet" and at a cheaper price than offerings from OpenAI and Anthropic.
Meta also released Muse Image, which contains certain features that power users and creators can access if they sign up for one of the company's new monthly subscription plans that were revealed in May.
The company has been aggressively investing in a new AI strategy since hiring Wang in June 2025 in a deal that involved a $14.3 billion investment in Scale AI, Wang's startup. Meanwhile, Meta is pouring money into AI infrastructure as it tries to keep pace with Alphabet, Amazon and Microsoft when it comes to building data centers and securing AI chips and systems needed to run models and workloads.
On Tuesday, Meta announced a venture with BlackRock to create a $14 billion data center project in El Paso, Texas, just a few weeks after disclosing that its big Hyperion data center project in rural Louisiana would cost over $50 billion. Earlier in July, Meta revealed plans to build a $9 billion data center in Alberta, Canada.
Meta shares are down 10% this year, badly trailing the Nasdaq, as Wall Street questions whether the company's hefty investments will produce returns.
"The gap between capex intensity and diversified monetization remains the central debate for the stock," analysts at Wedbush wrote in a report last week. They have the equivalent of a hold rating on the shares and said the uncertainty is "the reason we remain on the sidelines despite Meta's valuation discount to peers."
In its last earnings report in April, Meta boosted its capex forecast for the year to a high of $145 billion from $135 billion. Analysts expect Meta to post $33.9 billion in capex for the second quarter and are projecting $136.7 billion for the year.
Alphabet shares sank last week after the company hiked its guidance for 2026 capex to as much as $205 billion from a prior prediction of up to $190 billion.
Among the four leading hyperscalers, Meta is the only one without a cloud infrastructure business. But Zuckerberg has indicated recently that the company will be looking to sell some AI capacity to third parties. Anthropic is currently engaged in preliminary talks to lease AI-related computing capacity from Meta, CNBC confirmed earlier this month.
For the second quarter, Meta is expected to report 3.61 billion daily active people (DAP), according to StreetAccount, a number that refers to usage of its family of apps. Analysts anticipate second-quarter average revenue per person of $16.65.
Meta's Reality Labs unit, which develops virtual reality, augmented reality and AI-powered wearable devices like the Ray-Ban Meta glasses, is expected to post a loss for the quarter of $5.07 billion on revenue of $423.4 million, according to StreetAccount.
WATCH: AI and capex in focus for Meta this week: Here's what to expect.
At $593.41, Meta Platforms (NASDAQ:META | META Price Prediction) screens as an attractive setup for research. The stock has slid roughly 17% over the past year even as advertising revenue accelerated, creating a rare dislocation between price action and operating momentum.
Meta owns Facebook, Instagram, WhatsApp, Messenger, Threads, Meta Quest, and Ray-Ban Meta glasses, reaching 3.56 billion daily active people across its Family of Apps. The advertising engine has proven durable, but the market has punished the stock in 2026 as capital expenditure guidance climbed. Shares peaked near $712 in January, then drifted lower as Wall Street digested a $125 to $145 billion full-year CapEx budget aimed at Meta Superintelligence Labs.
That reset is the reason the setup looks attractive now. Fundamentals are strengthening, the balance sheet is fortress-grade, and sentiment has flipped defensive right before an earnings catalyst.
The Ad Flywheel Is Funding the AI Arms Race Q1 2026 delivered $56.31 billion in revenue, up 33.1% year over year, with ad impressions up 19% and price per ad up 12%. Dual-lever growth, both volume and pricing expanding, signals a platform gaining monetization efficiency from AI ranking improvements.
Profitability is elite. Trailing metrics show a 30.08% net margin, 30.24% ROE, and operating margin of 40.6%. Leverage is negligible with net debt to EBITDA at 0.47 and interest coverage of 71 times. Meta returned $26.25 billion via buybacks in 2025. Per user-provided instructions, Meta is actively monetizing its AI infrastructure in real time through its core advertising flywheel, converting AI investment directly into revenue. The five consecutive EPS beats back that up.
CapEx, Reality Labs, and the Regulatory Overhang The bear case centers on cash burn on the periphery. Reality Labs lost $4.03 billion last quarter and $19.2 billion in 2025. Free cash flow dropped 19.39% last year, and the raised CapEx range implies further compression.
Reported EPS is also flattered. Q1 2026 included an $8.03 billion tax benefit worth $3.13 per share. Strip it out, and operational EPS was closer to $7.31. Layer on EU Digital Markets Act pressure, U.S. youth-related litigation with trials scheduled in 2026, and consistent executive selling with no insider buying at the $600 level, and the bear thesis has real teeth.
The Argument for Waiting A patient investor could wait for the Q2 earnings report to resolve the capex-versus-monetization debate. Prediction markets currently place the odds of an earnings beat at 86.7%, but the same markets cluster near-term price probability in the $580 to $620 range, implying limited immediate upside.
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The trigger to move off the sidelines is evidence that 2026 operating income can rise despite infrastructure spend, which management has already guided toward. The cost of waiting is missing a rerating if the earnings report confirms it.
What the Numbers Say About Positioning Meta trades at 21x trailing earnings and 19x forward, a reasonable multiple for a business growing revenue above 30%. The consensus analyst price target sits at $825.84, implying 28.52% upside from current levels.
Coverage is deep and lopsided bullish. Of the analysts tracked, 8 rate the stock Strong Buy, 49 rate it Buy, 6 rate it Hold, and none rate it Sell. Meta is down 9.95% year to date while the S&P 500 is up 8.64%, a roughly 18-point relative underperformance that has done most of the derating work already.
Meta at $593 With Clear Invalidation Triggers At $593.41, Meta screens attractively on valuation and growth. The setup rewards growth-at-a-reasonable-price buyers. A 19x forward multiple on a business compounding revenue north of 20% annually, generating 40%-plus operating margins, and returning tens of billions in buybacks is uncommon outside of drawdowns. Q2 earnings should confirm the ad flywheel is absorbing higher costs, expectations reset upward, and multiple expansion follows.
Reddit sentiment showed a sharp collapse on July 22-23 followed by a 24-48 hour recovery, suggesting the pullback was fear-driven positioning ahead of earnings rather than a fundamental break. Contrarian entries thrive on exactly this pattern.
Invalidation is defined. A miss on Q2 revenue or a downward revision to 2026 operating income guidance breaks the thesis. So would a material adverse ruling in EU or youth-litigation cases. Absent those, the risk/reward tilts firmly to the upside.
Meta at $593 offers a rare chance to buy a fortress-margin, cash-generative AI monetizer while sentiment is defensive and expectations are low.
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Meta Platforms (META, Financials) is a social media and digital advertising company that's entering second-quarter earnings on the heels of its longest losing s
Meta Platforms is slated to post its quarterly earnings after markets close today, with traders pricing in a sizable move from the social media giant's stock.
Meta Platforms, Inc. (NASDAQ:META) will release its second quarter earnings report after the closing bell on Wednesday, July 29.
Analysts expect the Menlo Park, California-based company to report quarterly earnings of $7.23 per share. The consensus estimate for Meta’s quarterly revenue is $59.50 billion. It reported $47.52 billion last year, according to Benzinga Pro.
Meta has topped revenue estimates for 15 consecutive quarters and beaten EPS expectations in 13 straight.
Shares of Meta fell 0.1% to close at $593.41 on Tuesday.
Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.
Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period.
Considering buying META stock? Here’s what analysts think:
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Meta Platforms (META -0.06%) has underperformed broader equities over the past year. One of the most important reasons why is that although it has ramped up spending to capitalize on what it perceives as a large opportunity in artificial intelligence (AI), the market doesn't see it that way. Meta's increased spending could lead to lower profits and margins if it doesn't achieve the return on investment it expects, the argument goes. However, Meta Platforms' CEO, Mark Zuckerberg, remains unapologetically bullish on AI. Under his leadership, the company is reportedly working on a deal that could justify the billions it is pouring into the technology.
Image source: The Motley Fool.
Meta's new business venture is slowly taking shape Several weeks ago, reports surfaced suggesting that Meta Platforms was planning to launch a cloud business. The company is apparently looking to rent out excess AI computing capacity to other corporations. Now, Meta is reportedly in early talks to do exactly that with Anthropic, a leading AI company, although the deal is far from done and could still fall through. Anthropic builds large language models (LLMs) and is the corporation behind Claude, a family of LLMs that are arguably among the best on the market. Meta could sign a two-year, $10 billion deal to rent excess AI capacity to Anthropic.
The social media specialist generated about $200 billion in sales last year; an extra $5 billion per year may not move the needle. However, if Meta does secure this deal, it might only be the first of many. Anthropic isn't a small client, and it has historically relied on Amazon (AMZN -0.19%), the industry leader, for its cloud computing needs. Securing a client like this will be a great way for Meta Platforms to enter the cloud market. As analysts project rapid expansion in AI infrastructure spending over the next several years, Meta could sign similar deals with other big names and turn its cloud computing business into a meaningful growth driver.
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Is Meta Platforms stock a buy? Meta Platforms' financial results remain strong. The company has improved its core advertising business thanks to AI. Sophisticated recommendation algorithms have helped increase engagement across its websites and apps, while the company has also made it much easier for advertisers to launch ad campaigns. So far, Zuckerberg's optimism has borne fruit, and while some investors worry the AI tailwind will end, there are strong reasons to believe otherwise.
With more than three billion daily active users, Meta Platforms may only be in the early innings of its efforts to monetize AI. In the future, the company could make money from several initiatives, including subscriptions, AI agents for businesses and customers on WhatsApp, among many other monetization schemes the company could launch. Meta Platforms is still fine-tuning its cloud computing business, but its core operations are already strong, and this new opportunity may be the icing on the cake. That's why Meta Platforms' shares are worth buying on the dip.
Meta CEO Mark Zuckerberg attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, U.S., July 9, 2026. REUTERS/Brendan McDermid Purchase Licensing Rights, opens new tab
July 28 (Reuters) - The U.S. government should not block Chinese models to gain an edge in the AI race, Meta Platforms (META.O), opens new tab CEO Mark Zuckerberg told the Financial Times in an interview published on Tuesday, as Washington warns that Chinese companies could face penalties over the alleged theft of U.S. technology.
Zuckerberg said that banning cutting-edge Chinese AI would not be "an effective solution," adding that U.S. companies should "systematically” identify bottlenecks and roadblocks in order to better compete with Chinese AI firms.
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Beijing-based Moonshot AI, whose recently released Kimi K3 model has drawn attention for its coding capabilities, has intensified debate in Washington over whether Chinese developers are copying U.S. models or rapidly closing the technological gap through their own research.
The Trump administration on Tuesday unveiled bans that target imports of new Chinese robots and power inverters, seeking to protect the U.S. AI buildout from national security threats and reshore key industries slated for explosive growth.
Separately, U.S. Treasury Secretary Scott Bessent has warned that Chinese companies could face financial sanctions or placement on the Commerce Department's Entity List, which restricts access to U.S. technology.
When asked for a comment on the FT interview, Meta referred to an opinion piece by Zuckerberg in the Wall Street Journal.
Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Meta Platforms (META, Financials), the social media and digital advertising company, has asked BlackRock to help fund a $14 billion data center campus in El Pas
Key Takeaways Meta Platforms' Q2 ad revenues are estimated at $59.035B, up 26.8% year over year.AI ad systems improved conversions, while generative tools helped advertisers boost campaign returns.Instagram, Threads and WhatsApp gained from AI recommendations, translation, messaging and wider ad reach. Meta Platforms’ (META - Free Report) second-quarter 2026 results, set to be reported on July 29, are expected to reflect the benefits of higher advertising revenues, driven by sustained growth in user engagement and ad impressions across its Family of Apps. In the first quarter of 2026, ad impressions increased 19% year over year, supported by user growth, stronger engagement and ad-load optimization. The average price per ad also rose 12%, reflecting improved ad performance, healthier advertiser demand and favorable currency movements.
AI-driven improvements to Meta’s advertising systems are likely to have remained a major growth catalyst in the to-be-reported quarter. Enhancements to the Lattice and GEM models drove a more than 6% improvement in conversion rates for landing-page-view ads, while the Adaptive Ranking Model generated a 1.6% conversion-rate increase across major Facebook and Instagram surfaces. Better ad selection and targeting likely encouraged advertisers to increase spending by improving campaign returns. Increasing adoption of Meta’s generative-AI advertising tools is also expected to have aided second-quarter performance.
The Meta AI business assistant, AI connectors and value-optimization tools are also helping advertisers create content, resolve account issues and improve return on ad spending. Meta is further optimizing when, where and to whom ads are displayed rather than depending only on higher ad loads. Ad-load increases on Instagram Feed and Reels contributed to first-quarter impression growth, although user and engagement gains remained the larger driver. The company’s measured approach to placing ads at more relevant moments is likely to have supported incremental conversions without materially weakening the user experience in the second quarter.
These trends are likely to have continued supporting advertising revenues in the to-be-reported quarter. The Zacks Consensus Estimate for Meta’s second-quarter advertising revenues is pegged at $59.035 billion, indicating growth of 26.8% year over year. Click here to learn how Meta’s overall second-quarter performance is likely to be.
META’s AI Push to Aid Instagram, Threads and WhatsApp in Q2Instagram is expected to have benefited significantly from AI-powered recommendation and content-understanding improvements. Ranking enhancements drove a 10% increase in Reels time spent in the first quarter of 2026. Meta doubled the length of user-interaction sequences used to train Instagram models and improved the richness of the data describing each interaction, allowing its systems to better understand users’ interests. Faster indexing and improved content recognition also increased the freshness and diversity of recommendations, with same-day posts accounting for more than 30% of recommended Reels.
AI translation and dubbing are likely to have further expanded Instagram’s content inventory and engagement. More than half a billion users on each of Facebook and Instagram were watching AI-translated videos weekly. Meta’s policy of allowing creators’ videos to reach viewers across different languages and regions means these capabilities are likely to have increased watch time, improved content discovery and created additional advertising opportunities on Instagram during the to-be-reported quarter.
Threads is expected to have benefited from improvements in AI-powered content recommendations, particularly around timeliness, relevance and cultural trends. The platform had more than 150 million daily active users, while Meta continued investing in creator partnerships and priority topics such as sports, entertainment and K-pop. Ads were expanded to more than 200 countries, and improved recommendations are likely to have strengthened user engagement and advertising inventory, although Threads is not expected to be a meaningful contributor to Meta’s overall revenues in 2026.
WhatsApp’s prospects are likely to have benefited from Meta’s AI push through business messaging, Business AIs and the gradual rollout of Status ads. Business AIs were facilitating more than 10 million conversations per week, up from 1 million at the beginning of the year, helping small businesses answer customer questions and engage potential buyers.
The Zacks Consensus Estimate for Meta’s second-quarter Family of Apps revenues is pegged at $59.605 billion, indicating growth of 26.4% year over year.
Zacks Rank & Upcoming Earnings to WatchMeta currently has a Zacks Rank #3 (Hold).
Reddit (RDDT - Free Report) , Arrow Electronics (ARW - Free Report) , and HubSpot (HUBS - Free Report) are some better-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Reddit, Arrow Electronics and HubSpot are expected to report their quarterly results on July 30, Aug. 6, and Aug. 5, respectively. Shares of Reddit and HubSpot have dropped 22.1% and 44.5%, respectively, while Arrow Electronics has jumped 93.5% year to date.
Key Takeaways Meta Platforms is expanding AI data center capacity to support advanced models and global AI services.BlackRock partnerships and sites in El Paso and Alberta aim to accelerate infrastructure growth.More compute is improving engagement, ad conversions and monetization across Meta's platforms. Meta Platforms (META - Free Report) expanding data center footprint is strengthening its long-term prospects by providing the compute capacity required to train increasingly advanced AI models and deploy inference-intensive services at a global scale. The company is substantially expanding owned and leased facilities while securing third-party cloud capacity that will come online progressively through 2026 and 2027. These investments are expected to ease current compute constraints, accelerate model development and support personal and business AI agents, Meta AI, next-generation recommendation systems and other AI experiences for billions of users.
Meta is also pursuing capital partnerships to accelerate expansion while retaining strategic flexibility. The company’s venture with BlackRock will develop a 1-gigawatt data center campus in El Paso, expected to begin bringing capacity online in 2028, while a separate 1-gigawatt facility in Alberta will expand its global AI-optimized fleet. The El Paso campus will support AI model development and core-business enhancements, with BlackRock providing capital and infrastructure-financing expertise. This financing approach should help Meta build capacity faster and at greater scale, although rising depreciation, operating costs and infrastructure spending remain near-term margin risks. Meta expects 2026 capital expenditures of $125-$145 billion, including additional data center costs for future capacity.
The infrastructure buildout is expected to enhance Meta’s core advertising business. Greater compute availability enables the company to use larger and more predictive models for content ranking, ad recommendations and real-time inference. These capabilities are already improving engagement and advertiser returns, with AI-led ranking enhancements lifting Reels time spent and video watch time, while advanced advertising models have increased conversion rates. The company’s initiative to expand data center capacity is expected to help Meta scale these improvements across Facebook, Instagram, WhatsApp and Threads, supporting higher engagement, stronger ad performance and increased monetization over time.
In the first quarter of 2026, ad impressions increased 19% year over year, supported by user growth, stronger engagement and ad-load optimization. The average price per ad also rose 12%, reflecting improved ad performance, healthier advertiser demand and favorable currency movements. The Zacks Consensus Estimate for Meta’s second-quarter advertising revenues is pegged at $59.035 billion, indicating growth of 26.8% year over year.
META Faces Tough Competition in the Ad SpaceMeta Platforms is facing stiff competition from the likes of Alphabet (GOOGL - Free Report) and Amazon (AMZN - Free Report) in the ad domain.
Alphabet is intensifying competition with Meta for digital advertising budgets by combining the high-intent nature of Google Search with AI-powered targeting, creative generation and campaign automation. Gemini is being deployed across Google’s advertising infrastructure to improve query understanding, ad relevance and advertiser returns. The technology helps Google interpret longer and more detailed searches that were previously difficult to monetize, while shopping-ad improvements generated a 20% increase in highly relevant ad placements. This strengthens Alphabet’s ability to capture performance-ad spending that might otherwise flow to Meta’s Facebook and Instagram platforms.
Amazon’s advertising business continues rapid expansion as brands allocate more marketing budgets to its platform, leveraging its valuable consumer data and purchase intent signals. Advertising services revenues jumped 24% year over year to $17.2 billion in the first quarter of 2026, and advertising revenues grew to more than $70 billion in trailing-12-month revenues, reflecting successful AI-powered optimization of the platform and growing market share in digital advertising.
META’s Share Price Performance, Valuation & EstimatesMeta Platforms shares have dropped 10.1% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 9.5%.
META Stock’s Price Performance
Image Source: Zacks Investment Research
Meta Platforms stock is trading at a premium, with a forward 12-month price/sales of 5.32X compared with the Zacks Internet Software industry’s 3.81X. META has a Value Score of C.
META’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $33.11 per share, up 0.3% over the past 30 days, suggesting 41% year-over-year growth.
Meta Platforms currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meta Platforms Q2 Earnings EstimatesAnalysts expect Meta to report Q2 revenue of $60.22 billion and earnings per share of $7.14. That’s up from revenue of $47.52 billion and EPS of $5.16 in the year-ago quarter, according to Benzinga Pro.
Meta has topped revenue estimates for 15 consecutive quarters and beaten EPS expectations in 13 straight.
The company previously guided for Q2 revenue of $58 billion to $61 billion, putting consensus estimates near the upper end of its forecast range.
What Analysts Are SayingWedbush analyst Ygal Arounian said Meta’s Q2 results could highlight the strength of its advertising business, driven by AI-powered improvements and a favorable macroeconomic backdrop, in a recent note.
Beyond advertising, Arounian said investors should watch for updates on Meta AI, subscription offerings and a potential cloud business.
Arounian reiterated a Neutral rating and a $671 price target.
Capital expenditures are also expected to be a major focus. Wedbush projects Meta will spend $138 billion in capex in 2026, near the middle of management’s guidance range of $125 billion to $145 billion. For 2027, the firm forecasts capex will rise to $173 billion.
Here are other recent analyst ratings on Meta and their price targets:
Guggenheim: Maintained Buy rating, with $800 price target Raymond James: Maintained Strong Buy rating, raised price target from $825 to $850 Wells Fargo: Maintained Overweight rating, raised price target from $767 to $835 Capital expenditures will likely be a primary focus. However, investors will also be watching for signs that Meta’s core advertising business remains strong.
In the first quarter, revenue rose 33% year over year, fueled by robust advertising growth. Ad impressions increased 19%, while the average price per ad climbed 12%.
CEO Mark Zuckerberg called Q1 a “milestone quarter with strong momentum.” Investors will be looking for that momentum to continue in the second quarter.
Daily active users across Meta’s family of apps will also be closely watched after growth slowed slightly last quarter due to softer international usage.
As one of four Magnificent Seven companies reporting earnings this week, Meta’s results could influence sentiment across the technology sector and broader market indexes.
Meta Price ActionMeta stock is up 0.4% to $596.25 on Tuesday versus a 52-week trading range of $520.26 to $796.25. Meta stock is down 8.3% year-to-date in 2026.
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