Key Takeaways
- Two major firms, Bernstein and Mizuho, maintained Buy-equivalent ratings on META shares before the July 29 Q2 report
- Analyst consensus forecasts earnings per share of $7.19 on revenue of $60.22 billion, marking a 26.7% jump from last year
- Speculation intensifies that Meta will unveil a cloud computing division during the earnings presentation
- Sources indicate Meta may be negotiating a computing power lease agreement with Anthropic valued at $10 billion
- Analyst consensus price target stands at $818.23, suggesting approximately 40% potential upside
Meta Platforms is scheduled to unveil its second-quarter financial results on July 29, with analysts maintaining heightened attention. Shares of META were changing hands around $627.52 ahead of the announcement, reflecting a roughly 2.5% decline during the session.
Mark Shmulik from Bernstein maintained his Buy recommendation, arguing that the risk-reward profile tilts favorably entering the quarterly report. He highlighted the robust performance of the company’s primary advertising operations, while acknowledging that more challenging year-over-year metrics loom for the third quarter.
Shmulik anticipates Meta will share developments regarding artificial intelligence initiatives, including Muse Spark and emerging infrastructure partnerships. He also observed that capital expenditures are projected to increase substantially, with facilities planned for 2027 going live and bill of materials inflation driving spending toward the $225 billion to $250 billion corridor.
Lloyd Walmsley at Mizuho similarly retained his Outperform designation, setting a price objective of $835. He identified Meta as his preferred selection within the online advertising sector, emphasizing robust user engagement and consistent expansion across advertising platforms.
Walmsley highlighted possible announcements regarding WhatsApp and Messenger revenue generation, along with additional information on Meta’s potential strategy to rent out computational resources as part of an expanded AI initiative.
Street consensus anticipates second-quarter earnings per share of $7.19 alongside revenue of $60.22 billion — representing a 26.7% year-over-year expansion. While these projections establish elevated expectations, analysts appear confident in Meta’s ability to meet them.
Cloud Business Reveal Anticipated at July 29 Event
The more significant narrative surrounding earnings may extend beyond advertising performance. Growing speculation suggests Meta will officially introduce a cloud computing division during the July 29 presentation.
Chief Executive Mark Zuckerberg indicated earlier this year that launching a cloud operation is “definitely on the table.” Bloomberg subsequently reported the company is actively developing such a service, while The New York Times disclosed that Meta is negotiating to provide computing infrastructure to Anthropic in an arrangement potentially valued at $10 billion across two years.
Meta has not officially validated either account. However, the strategic rationale appears compelling. The organization intends to allocate between $125 billion and $145 billion toward capital expenditures this year, predominantly for AI infrastructure. Currently, Meta remains the sole entity among the four dominant hyperscalers — along with Alphabet, Microsoft, and Amazon — operating without a cloud services division.
Alphabet recently disclosed 82% revenue expansion to $24.8 billion in Google Cloud, with operating profits more than tripling to $8.8 billion. Such performance metrics are difficult to overlook.
Key Factors for Investors
Zuckerberg has revealed Meta receives inquiries about cloud offerings on a weekly basis. Launching a cloud platform would establish a secondary major revenue channel and provide clearer justification for the company’s substantial infrastructure investments.
With a price-to-earnings multiple hovering around 24, Meta trades below valuation levels typical of comparable mega-cap technology companies. Analysts perceive additional upside potential.
Based on 37 analyst assessments compiled by TipRanks during the past three months, META carries a consensus Strong Buy rating — consisting of 32 Buy recommendations and five Hold ratings. The mean price target registers at $818.23, representing approximately 40% upside from present trading levels.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
