Meta stock soars on Wednesday issued better-than-expected guidance for the current quarter after reporting second-quarter results that beat analyst estimates on both the top and bottom lines.
Stock Performance and Earnings
Meta Platforms Inc (NASDAQ) saw its stock rise around 7% in premarket trading on Thursday. For the three months ended June 30, the company reported earnings of $5.16 per share on revenue of $39.07 billion, surpassing estimates of $4.70 per share and $38.26 billion, respectively.
Meta stock soars
The company’s Daily Active People (DAP) reached 3.27 billion, up 7% in Q2 from the same period last year. Capital expenditures (capex) for Q2 were $8.47 billion, down from $6.72 billion in Q1.
Q3 Revenue Outlook
Looking ahead to Q3, Meta expects total revenue to be between $38.5 billion and $41 billion, with a midpoint of $39.75 billion, exceeding Wall Street estimates of $39.09 billion. The company also raised the lower range of its annual capital spending outlook to $37 billion to $40 billion from the previous $35 billion to $40 billion. However, the total expense guidance for the full year remains unchanged at $96 billion to $99 billion.
Infrastructure and Expense Growth
Meta noted that infrastructure costs will be a significant driver of expense growth next year as they recognize depreciation and operating costs associated with their expanded infrastructure footprint.
Analyst Reactions
KeyBanc Capital Markets reiterated an Overweight rating on META stock and raised their price target from $540 to $560. “We believe Meta’s 2Q print reinforced that the core business is seeing AI returns today, while AI assistants and agents will create returns over the medium term,” they said. They also highlighted that AI efficiencies for merchants could drive further share gains and support consistent 10%+ annual advertising revenue growth.
Similarly, Stifel analysts increased their target price on Meta shares from $550 to $590, noting that the elevated lower end of the capex outlook was the “only real wrinkle” from the report. “It’s hard to deny the increase in capex is material, but we believe Meta’s AI initiatives are paying off already, with better engagement and advertiser tools driving incremental budgets.
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