BofA Sees Meta Beating Q2 Estimates as Ad Growth Powers Ahead
Bank of America expects Meta Platforms, Inc. (NASDAQ: META) to clear Wall Street’s second-quarter bar, pointing to resilient advertising demand — even as rising memory costs threaten to push the tech giant’s spending higher.
The Call
In a Monday note to clients, BofA Securities analyst Justin Post laid out a bullish case ahead of Meta’s July 29 earnings. He projects earnings of $7.50 per share on revenue of $60.63 billion for the June quarter, topping the Street’s consensus of $7.18 and $60.20 billion. Strong ad trends drive the upside, Post argued, though a recently weaker US dollar offsets some of the gain.
Why BofA Expects an Earnings Beat
Cost discipline plays a central role in the thesis. Because Meta cut its workforce by 10% in May and slashed job postings by 49% quarter over quarter, Post sees room for EPS to surprise to the upside. Beyond staffing, he expects the company’s AI investments to pay off directly: improved content retrieval, ad-revenue gains from AI model integration, momentum behind its Muse Spark product, and the potential to sell external compute all stand out as likely focus areas on the earnings call.
The Spending Question
Higher costs, however, could reshape Meta’s capital plans. According to the note, the company may raise its 2026 capex outlook to a range of $135 billion to $150 billion, up from its current $125 billion to $145 billion, as memory prices climb. Post doesn’t expect that spending to ease anytime soon. “We do not expect AI infrastructure investment to slow near term given industry-wide compute capacity constraints,” he wrote. Looking ahead, BofA anticipates Meta will guide current-quarter revenue to between $60.5 billion and $63.5 billion.
Risks to Watch
Still, several factors could complicate the picture. Tougher year-over-year comparisons might slow ad growth below expectations, and any escalation or prolonged conflict in the Middle East could dent ad spending and weigh on Meta’s third-quarter outlook. Investors will also listen closely for commentary that signals another step-up in 2027 capex, potential capital raises, or developments in a social-media addiction trial set to begin in August.
The Bottom Line
Despite those risks, BofA reiterated its buy rating on Meta and held its price target at $835. In the firm’s view, the current valuation “underappreciates AI capacity benefits,” and new revenue streams — from large language model integration to proprietary chip progress — should power the stock from here. Meta reports its second-quarter results on July 29.
