Meta Earnings Updates: Analysts Eye AI Plans, With Stock up 20% in 2025

You can expect AI to be a heavy focus on this earnings call. (What else is new?) The company is allocating billions in capital expenditures toward infrastructure, talent, and other costs to support its AI ambitions.

Meta has been in an all-out talent war for the biggest names in AI, poaching some competitors from rival firms with million-dollar bonuses.

The company in June announced a new AI division called Superintelligence Labs. The company took a 49% stake in Scale AI for nearly $15 billion to make Scale founder Alexandr Wang Meta’s new chief AI officer.

— Sarah Jackson

Angelo Zino, an analyst at CFRA Research, wrote this month that investors will likely be most interested in three things heading into Meta’s earnings call:

1. The implications of the company’s recent “AI hiring spree.”
2. The health of Meta’s ad spending across its social media platforms.
3. The company’s monetization of AI and other growth initiatives.

Still, Zino said he expects Meta to meet its expected revenue targets for the second and third quarters, largely due to increased stability in the digital ad market.

CFRA reiterated its “Buy” rating on the stock and lifted its price target to $800 from $750, implying 12% upside from current levels.

Zuckerberg kicked off the company’s earnings day by sharing his vision on superintelligence, which he believes is “now in sight.” His memo Wednesday outlined his hope for a future where everyone has “a personal superintelligence that helps you achieve your goals.”

“Personal superintelligence that knows us deeply, understands our goals, and can help us achieve them will be by far the most useful,” he wrote. “Personal devices like glasses that understand our context because they can see what we see, hear what we hear, and interact with us throughout the day will become our primary computing devices.” (Of course, it’s worth noting that Meta sells various smart glasses.)

— Sarah Jackson

Meta could lift its capital expenditures even higher as it ploughs more money into AI and superintelligence projects, analysts at Citizens wrote.

“With Meta making material investments in its superintelligence team, including researchers and compute, we believe the company is going through a significant investment cycle and we expect 2026 CapEx to surprise the Street as Meta builds multiple 1GQ or greater data centers,” they said, estimating capex could come in around $91 billion next year.

Stocks typically don’t benefit when a company is going through an investment cycle, analysts said, but the situation could be different for Meta, as AI can enhance the ad experience for users.

The firm reiterated its “Market Outperform” rating and $750 price target on the stock, implying 5% upside from current levels.

Needham had a mixed view of Meta headed into its second-quarter earnings.

On the one hand, the firm’s analysts upgraded their rating for the stock from “Underperform” to “Hold,” citing two positive catalysts:

• Rising revenue. “Based on our channel checks, we expect META to over-deliver on our prior rev and margin estimates for 2Q25 and FY 25,” the analysts said, estimating that Meta would post 14% revenue growth and 6% earnings per share growth for the year.
• High productivity. Meta’s business could be more productive than other mega-cap tech firms, with the company scoring the highest on free cash flow relative to labor costs in 2024.

Still, the firm sees a few risks ahead that held it back from rating the stock a “buy.”

Those include pressure on Meta’s margins and free-cash flow, potentially higher-than-expected total labor costs due to stock-based compensation, and Meta’s use of several strategies in its business, which “wastes capital and adds risks,” analysts said.

Oppenheimer said it sees a handful of risks looming for Meta stock.

• Meta could struggle to innovate its AI features. “Scout” and Maverick,” the company’s latest AI models for Llama 4, “have dramatically trailed peers,” Oppenheimer said.
• Investors could sell Meta stock to divert proceeds to new tech IPOs.
• Meta’s ads could become less effective if privacy restrictions make it difficult for the company to track user data
• The company faces competition from the likes of Google, Microsoft, Pinterest, Twitter, and TikTok.

Oppenheimer reiterated its “Outperform” rating on the stock and lifted its price target to $775 a share, implying 9% upside from current levels.

Bank of America called Meta a “Top Online ad stock” for 2025 in a note this month.

That’s because the company looks best-positioned to reap the benefits from AI-driven advertising, analysts wrote, which they believe could support a higher valuation for the stock.

In a separate note, analysts said they expected Meta to beat consensus estimates for second-quarter earnings, pointing to positive checks the bank conducted on Meta’s advertising business. Revenue could come in around $45.5 billion, they estimated, at the higher end of Meta’s guidance for the quarter.

The bank reiterated its “Buy” rating on Meta. Earlier this month, it lifted its price target for the stock to $775 from $765, which implies 9% upside from current levels.

Second Quarter

• Revenue estimate $44.83 billion
• EPS estimate $5.89
• Advertising rev. estimate $44.07 billion
• Family of Apps revenue estimate $44.4 billion
• Reality Labs revenue estimate $386 million
• Other revenue estimate $502.4 million
• Operating income estimate $17.24 billion
• Family of Apps operating income estimate $22.16 billion
• Reality Labs operating loss estimate $4.86 billion
• Operating margin estimate 38.3%
• Ad impressions estimate +6.91%
• Average price per ad estimate +7.58%
• Average Family service users per day estimate 3.42 billion

Third Quarter

• Revenue estimate $46.21 billion
• Capital expenditure estimate $17.78 billion

Full year

• Total expenses estimate $114.01 billion
• Capital expenditure estimate $67.79 billion

Source: Bloomberg data