Meta Platforms ( (META) ) has been popular among investors this week. Here is a recap of the key news on this stock.
Meta Platforms is doubling down on artificial intelligence, and the latest quarter suggests the spending is already paying off. Q2 revenue climbed 28% to $60.8 billion, driven by a 27% jump in advertising sales as ad impressions rose and prices per ad improved. Engagement on Instagram and Facebook also increased, reflecting smarter ranking systems powered by Meta’s large language models.
Beyond the core ad business, AI is starting to open new revenue streams. WhatsApp paid messaging and subscriptions helped push Family of Apps’ other revenue up 73% to $1.01 billion. AI tools such as Advantage+ and Meta Business Agents are now used by millions of small firms, hinting at future subscription, usage-based and outcome-based monetization that could turn AI services into an ad-like auction model.
Investors remain wary of the cost of this strategy. Q2 operating cash flow reached $31.9 billion, but nearly dollar-for-dollar capital spending of $31.08 billion left free cash flow at just $784 million. Markets are focused on Meta’s massive $130 billion–$145 billion capex plan and the lack of separately reported AI revenue, making it hard to link each dollar of investment to sales.
Yet Meta Platforms still looks inexpensive on earnings. Consensus expectations for adjusted EPS of $31.05 in 2026 and $34.89 in 2027 put the stock at roughly 19x and 17x earnings, while revenue is projected to rise more than 20% next year. Wall Street remains optimistic, with a Strong Buy consensus, 38 Buy ratings, five Holds and an average price target of $753.67, implying about 29% upside over 12 months.
For long-term investors, the key question is whether Meta’s AI-heavy infrastructure can deliver a “double monetization”: boosting ad performance while creating new, direct AI revenue channels. If capex growth eventually normalizes and AI-led services scale as management expects, today’s valuation could underestimate the earnings power of Meta Platforms’ expanding compute estate.