Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) will report its latest quarterly earnings after Wednesday’s closing bell, with Wall Street analysts largely expecting another quarter of solid revenue and earnings growth, supported by continued strength in digital advertising and ongoing investments in artificial intelligence.
On average, analysts expect Meta to report a 31% year-over-year surge in revenue to $55.49 billion, with earnings per share projected to grow by 4.4% to $6.71.
According to Wedbush, the company is likely to deliver a strong beat as investors “continue to underestimate the flywheel effect of AI-powered ad monetization hitting the profit and loss.”
Wedbush added that Meta remains “one of the cleanest AI monetization stories in Big Tech,” where AI-related capital expenditures are increasingly translating into “measurable ad revenue uplift quarter over quarter.”
The firm’s checks on digital ad spending through the March quarter suggest sustained demand across e-commerce, consumer packaged goods, and financial services.
It also pointed to continued scaling in Reels advertising, which it said is tracking toward a roughly $50 billion annualized run rate, while monetization efforts in Threads are “now kicking into high gear,” according to Wedbush.
On spending, XTB research director Kathleen Brooks noted that capital expenditure expectations for the year remain elevated at roughly $60 billion to $65 billion, reflecting ongoing AI and infrastructure investment.
Brooks also highlighted that Meta’s valuation sits at a price-to-earnings multiple of 28.8, which is at the lower end of the Magnificent 7 group.
She added that geopolitical tensions remain a potential overhang, pointing to the recent scrapping of Meta’s tie-up with Chinese AI provider Manus by the Chinese government, which she said could be addressed on the earnings call.
Heading into the report, Jefferies said the setup remains constructive on both growth and expense dynamics. The firm wrote that the first quarter guide implies the fastest growth since Q3 2021, with reported revenue growth of 26% to 34% year-over -year, which it said would reinforce that “AI is supporting core ad momentum.”
Jefferies also noted that consensus expectations sit toward the stronger end of seasonal trends, suggesting relatively healthy underlying demand.
On valuation, Jefferies pointed out that Meta shares have lagged some peers since its last earnings report and continue to trade at a discount to Alphabet on a forward earnings basis.
The firm also highlighted potential expense flexibility, noting that planned workforce reductions could help offset rising AI investment costs, with “every $1 billion of opex reduction adding about $0.40 to financial year 2026 EPS,” according to its estimates.
However, risks remain centered on the macroeconomic backdrop. Jefferies cautioned that advertising demand is closely tied to GDP and that rising uncertainty could weigh on second-quarter guidance, even if expectations already include some conservatism. It also sees limited likelihood of major changes to the company’s capital expenditure outlook in the near term, given ongoing constraints in AI infrastructure capacity.
Shares of Meta were little changed on Wednesday afternoon at $670, having added about 1.5% in the year to date.