Meta Platforms (META) stock is surging Thursday after the parent company of Facebook and Instagram beat top- and bottom-line expectations for its second quarter and issued solid guidance for its third quarter.
In the three months ended June 30, Meta's revenue increased 22.1% year-over-year to $39.1 billion, due in part to a 7% rise in its family daily active people (DAP) users to 3.3 billion. Meta also said its earnings per share (EPS) jumped more than 73% from the year-ago period to $5.16.
"We had a strong quarter, and Meta AI is on track to be the most used artificial intelligent (AI) assistant in the world by the end of the year," said Meta Platforms' CEO Mark Zuckerberg in a statement. "We've released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we're driving good growth across our apps."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results topped analysts' expectations. Wall Street was anticipating revenue of $38.3 billion and earnings of $4.73 per share, according to Yahoo Finance.
For the third quarter, Meta anticipates revenue in the range of $38.5 billion to $41 billion. The midpoint of this range, $39.75 billion, came in ahead of analysts' expectations of $39.1 billion.
Meta also raised the low end of its full-year capital expenditures outlook, now anticipating a range of $37 billion to $40 billion from the previous guidance of $35 billion to $40 billion.
In the company's earnings call, Chief Financial Officer Susan Li said Meta expects "expect significant capex growth in 2025" as it invests to support AI research and product development efforts.
Is Meta Platforms stock a buy, sell or hold?
Meta Platforms is one of the best-performing Magnificent 7 stocks this year, up more than 47% on a price basis. Unsurprisingly, the social media giant is one of Wall Street's favorite stocks.
According to S&P Global Market Intelligence, the average analyst target price for META stock is $551.62, representing an upside of more than 6% to current levels. Additionally, the consensus recommendation is Buy, teetering on Strong Buy.
Financial services firm Wedbush is one of the most bullish outfits on META stock with an Outperform rating (equivalent to Buy) and a $600 price target.
"Meta continues to deliver healthy engagement trends," says Wedbush analyst Scott Devitt. "The company has a number of drivers of sustainable growth in place, including continued adoption of Advantage+ campaigns and improving monetization across Reels and messaging ads."
The analyst adds that the communication services stock's "risk/reward is attractive given the improved growth trajectory in the second half, broadly healthy digital advertising trends, and optionality related to future AI monetization."
Related Content
-
Stock Market Today: Trump Retreats, Markets RejoiceStocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
In Trump’s Economy Should 401(k) Savers 'Set It and Forget It?'It’s hard to bury your head in the sand when the markets are volatile. Here’s when it makes sense and when it doesn’t.
-
Stock Market Today: Trump Retreats, Markets Rejoice
Stocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw BackTesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
-
Early-Stage Startup Deals: How Do Convertible Notes Work?Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
-
Stock Market Today: Stocks Soar on China Trade Talk HopesTreasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
-
How Can Investors Profit From AI's Energy Use?Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
-
Can Trump Fire Powell? A Supreme Court Case Could DecidePresidential posts threaten to overwhelm decades of precedent and tradition, whatever the nine justices decide.
-
What Are AI Agents and What Can They Do for You?AI agents promise to be the next big thing in artificial intelligence, but what exactly do they do?
