Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) is set to report its fourth quarter earnings on Wednesday, with Bank of America analysts expecting a modest beat compared to Street expectations while warning that 2026 expense guidance will be the central focus for investors.
The analysts maintained their ‘Buy’ rating and $810 price target, arguing that current valuations already reflect major AI and infrastructure investment.
“Checks suggest potential upside driven by healthy macro, usage growth, & AI targeting,” the analyst wrote.
They expect Q4 revenue of $59.2 billion and EPS of $8.27, compared with Street expectations of $58.3 billion and $8.20. “Data suggests potential Q4 expense discipline, with Q4 job postings down 16% quarter-over-quarter (versus Street 3% quarter-over-quarter),” they noted.
They also highlighted that “set up is aided by growing concerns on 2026 expense guide, risk is a larger-than-expected investment cycle.”
For first-quarter guidance, the analysts forecast revenue between $50 billion and $52.5 billion and full-year 2026 expenses of $153 billion to $160 billion, above Street expectations.
They added that the expense outlook could come in lower if revenue growth weakens, while the upper end of the range would give Meta room to invest more heavily in AI capacity.
For CapEx, they expect guidance in the range of $109 billion to $114 billion, compared to the consensus of $110 billion.
The analysts said that investors have been increasingly focused on Meta’s expected expense growth for 2026, and they believe a guide showing roughly 30% growth would be viewed positively, while a rate at or above 35% could be a negative surprise.
They also noted that upbeat updates on the NT Avocado rollout, new AI video tools, and sustained revenue momentum could help offset concerns. However, they cautioned that if Meta signals a longer or more aggressive investment cycle, pushing both expenses and capital spending higher, analysts may revise 2027 forecasts downward.
On valuation, the analysts wrote that Meta is trading below its historical forward earnings multiple, with current pricing roughly in line with the broader market and below the company’s long-term premium.
“If expense guide is close to expectations, we see potential for AI sentiment & valuation multiple to expand as Street anticipates launch of LLM & new AI products (e.g. Meta Business AI, agents, Vibes expansion),” they wrote.
Shares of Meta traded hands at $670 in the early afternoon on Wednesday.
- Updated with share price movement -