Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) is set to deliver another solid quarterly report driven by strength in its advertising business when it hands down its Q2 earnings next week.
The Street expects Meta to report earnings per share (EPS) of $5.80 on revenue of $44.7 billion, representing growth of 12% and 14% respectively.
Analysts at Jefferies raised their price target on Meta to $845 from $790 ahead of the report and maintained their ‘Buy’ rating.
Shares closed at $705 on Tuesday, up about 20% so far in 2025.
The analysts also raised their revenue estimates for both the June quarter and full year 2025, citing improving macroeconomic conditions, strong advertising checks, and Meta’s aggressive push into artificial intelligence.
“We are increasing our Q2/fiscal year 2025 revenue estimates by 3.1%/2.6% respectively, now implying 15.7%/14.1% year-over-year growth,” Jefferies wrote.
“Our revised Q2 revenue estimate of $45.2 billion implies revenue growth of 15.7% year-over-year, which is at the high end of guide (8.8% to 16.5%) and above consensus 14.2%.”
Their ad checks have indicated a rebound from April lows and improved sentiment, though macro uncertainty and tariff concerns remain.
Jefferies’ confidence extends into the third quarter, despite broader investor concerns about a possible slowdown in the second half of the year.
“Expectations appear achievable with Q3 revenue growth facing a 3-point easier comparison,” the analysts wrote, adding that consensus estimates “embed some conservatism when compared to typical seasonality.”
The analysts’ bullish thesis centers on Meta’s aggressive push into artificial intelligence, backed by major hires and heavy infrastructure investment.
“Meta has appointed Alexandr Wang, founder of Scale AI, as Chief Artificial Intelligence Officer, alongside Nat Friedman, former GitHub chief executive officer at Microsoft, and several other high-profile artificial intelligence researchers,” the analysts wrote.
“Our diligence suggests this move reflects Meta’s intent to streamline its artificial intelligence organization and inject top-tier technical leadership.”
Capital spending is expected to stay high, the analysts added. “We don’t expect Meta to pull back much on its capex initiatives given the importance of AI,” they wrote. Jefferies now forecasts capital expenditures of $68.6 billion in 2025 and $74.2 billion in 2026.
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