Meta Platforms: Analysts Bullish on AI Investments Ahead of Q2 Earnings

Meta Platforms is scheduled to report Q2 results after the closing bell on Wednesday, with 25 of 27 analysts covering the stock having a "buy" or equivalent rating. The consensus price target near $755 implies 6% upside. Analysts expect Q2 revenue of $44.81 billion, up 15% YoY, and net income of $15.19 billion, or $5.89 per share. Wells Fargo raised its price target to $783 from $664, citing Meta's investments in AI infrastructure.

Title: Meta Platforms (META) Set to Report Q2 Earnings Amid Analyst Bullishness

Meta Platforms (META) is set to report its second-quarter (Q2) earnings after the closing bell on Wednesday, July 30, 2025. Analysts are overwhelmingly optimistic about the tech giant, with 25 out of 27 analysts covering the stock holding a "buy" or equivalent rating [1]. The consensus price target near $755 implies a potential 6% upside over the stock's Friday closing price of approximately $713.

The primary focus of analysts' attention will be Meta's AI infrastructure spending plans, particularly given Google parent Alphabet's (GOOGL) recent increase in projected 2025 capital expenditures to $85 billion from $75 billion [1]. Meta expects to spend between $64 billion and $72 billion in capital expenditures this year, with Wells Fargo analysts projecting this figure to reach $76.7 billion in 2026 [1].

Analysts are increasingly bullish on Meta's AI investments, with Wells Fargo raising its price target to $783 from $664. The bank noted that the market has received these investments favorably, but expectations for the returns are rising [1]. CEO Mark Zuckerberg has been actively involved in recruiting talent for Meta's "Superintelligence" unit, including offering a pay package valued at over $200 million to an Apple executive in charge of AI models [1].

Meta's leadership is taking decisive action to fortify its AI bets, and analysts expect the company to report Q2 revenue of $44.81 billion, up 15% year-over-year, and net income of $15.19 billion, or $5.89 per share [1]. These figures represent a significant improvement from the previous year, with revenue increasing by 15% and net income per share rising by 16%.

Meta's strong advertising revenue growth prospects are expected to aid its Q2 results. The Zacks Consensus Estimate for second-quarter 2025 advertising revenues is currently pegged at $43.94 billion, suggesting 14.6% year-over-year growth [2]. Meta's offerings—WhatsApp, Instagram, Messenger, and Facebook—reach over three billion people daily, making it a key player in the digital ad sales market.

However, rising expenses related to AI investments and the Reality Labs business, which continues to burn cash, may put pressure on margins. The Zacks Consensus Estimate for Reality Labs' loss is pegged at $5.35 billion, wider than the year-ago quarter's loss of $4.49 billion [2].

Meta Platforms shares have outperformed the Zacks Computer & Technology sector and the Zacks Internet Software Industry year-to-date, with a 22.3% gain compared to the sector's 10.1% and the industry's 17.9% return [2]. The stock has also outperformed most of its peers, including Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), Microsoft (MSFT), and Tesla (TSLA).

Meta's strategic hires, including the appointment of Shengjia Zhao, co-creator of OpenAI's ChatGPT, as the chief scientist of its Superintelligence Labs, underscore the company's aggressive push to counter rivals like OpenAI and Google [3]. This move reflects the intensifying competition for top AI talent in the sector.

In conclusion, Meta Platforms' Q2 earnings report is set to be closely watched by investors and analysts alike. The company's strong AI investments, robust advertising revenue growth prospects, and strategic hires position it favorably for future growth.

References:
[1] https://www.investopedia.com/what-analysts-think-of-meta-stock-ahead-of-earnings-q2-fy2025-11779069
[2] https://www.tradingview.com/news/zacks:16b69b1a0094b:0-should-meta-platforms-stock-be-in-your-portfolio-pre-q2-earnings/
[3] https://www.ainvest.com/news/chatgpt-creator-named-chief-scientist-meta-superintelligence-labs-2507/