Meta Platforms (META) is expected to deliver strong Q2 results, driven by product improvements and a solid ad market, while artificial intelligence and capital expenditure remain key concerns, Wedbush Securities said in a note Wednesday.
The tech giant is scheduled to report its Q2 results on July 29.
The analysts said management reported growing user engagement with Meta AI and early positive signs for Business AI. However, beyond its advertising business, initiatives such as Meta AI/Muse Spark, Business AI, subscription tiers, a potential cloud offering, and custom AI chips are still in the early stages of development, they said.
The key debate for investors remains whether Meta's significant AI and capex spending will translate into diversified sources of monetization beyond its core advertising business, "and the reason we remain on the sidelines despite Meta's valuation discount to peers," the analysts added.
The analysts said they forecast revenue of $253 billion in 2026 and $301 billion in 2027. Earnings before interest, taxes, depreciation, and amortization are expected to be $146 billion in 2026 and $177 billion in 2027, while GAAP diluted earnings per share are projected at $33.02 and $34.09, respectively, they said.
Wedbush has a neutral rating and a $671 price target on Meta.
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