Coming midweek this week is Meta Platforms’ Q2 earnings report, where its AI spending will be in the spotlight. CEO Mark Zuckerberg has ushered in an AI-driven initiative that can be seen in the company’s recent spending. Many experts are mixed on whether to see this as a good or bad thing, but the overall AI expenditure in the earnings report will paint a better picture. Deciding whether to buy a stock right before an earnings report is a high-risk, high-reward strategy, so should you invest in META before the report?
Shares of the Mark Zuckerberg-led tech giant have gained 31% since Meta reported its Q1 results in late April. The stock has been helped by easing tariff concerns and Meta’s strong outlook it gave with its Q1 results. In addition, it’s seen a heavier lean towards AI under Zuckerberg’s recent plans for AI advertising. The Meta CEO has pledged to spend “hundreds of billions” on AI infrastructure, including to build a Manhattan-size data center. Based on the stock’s 22% gains year-to-date, META investors are welcoming the approach.
However, that climb has slowed in the past weeks. On the stock market today, Meta is up a fraction at 717.73. Shares are hovering near Meta’s 21-day moving average after pulling back from a record-high 747.90 on June 30. At press time, META is down 2.45% since that date. If the upcoming earnings report shows that the strong AI investments are reinforced by solid earnings, the Facebook developer’s stock could see a pump back to $730.
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Meta stock has a consensus rating of “Strong Buy” from the 54 analysts actively covering the stock, according to BarChart. Meanwhile, CNN rates the stock a 10/10, with 86% of 72 analysts surveyed suggesting to buy now. Its gains and innovations this year, compared to rivals Microsoft and Google, are incredibly promising. So far, while its expenditure is high, Meta’s revenue has countered it enough to make all of the AI investments worth it.
Analysts generally favor a positive outlook on META, with price targets mostly exceeding the current market price of $712.68. Wolfe Research’s Outperform rating comes with a $730 price target, slightly above the current price, while TD Cowen’s Buy rating suggests a significant upside with a $800 target.