All eyes will be on Meta Platforms heading into the closing bell, with expectations high going into second-quarter earnings.
With Meta's stock price (NASDAQ: META) starting the day strong, with an early 1% gain, markets are expectant. This morning's note from CEO Mark Zuckerberg makes the direction for the firm clear, with vision to bring super intelligent AI to all. The belief “in putting this power in people's hands to direct it towards what they value in their own lives,” comes as Meta looks to shake up their AI strategy.
Analysts estimate earnings per share (EPS) of $5.90 for the quarter, up strongly from the $5.16 reported in the same quarter Y/Y. Sales growth is expected to have accelerated at a rate of 14.75%, bringing revenue estimates to $44.84billion.
Meta's commitment to AI is undeniable. CEO Mark Zuckerberg has made it a top priority, leading to significant investments in infrastructure and talent. The company's $14.3 billion stake in Scale AI and the construction of large AI data centers underscore this commitment. Meta has even established a secretive “superintelligence lab,” poaching top talent to develop AI that surpasses human capabilities.
However, these investments are yet to translate into immediate profit gains. While second-quarter profit is expected to grow by 11.5% to $15.01 billion, this represents the slowest growth in two years.
Revenue growth, whilst strong, is projected to be the slowest in seven quarters, at 14.7%. Meta's Llama 4 language model has reportedly underperformed compared to competitors, leading some internal teams to utilize external AI models, adding further complexity and cost. The AI initiative is projected to increase R&D spending by up to $3.5 billion annually.
Wall Street analysts are generally optimistic about Meta's prospects, with a consensus “buy” rating among 72 analysts and a median price target of $750. The key question is whether Meta can justify its expensive AI endeavors with tangible financial results.
Meta has jumped out the gate, but can the outlook surprise to the upside?
Searching for the Perfect Broker?
Discover our top-recommended brokers for trading or investing in financial markets. Dive in and test their capabilities with complimentary demo accounts today!
- eToro Wide range of instruments available to trade – Read our Review
- Vantage High levels of account and deposit protection – Read our Review
- BlackBull 26,000+ Shares, Options, ETFs, Bonds, and other underlying assets – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
