Meta’s strong revenues could offset concerns over rising AI investments: Analysts
Meta Platform (Nasdaq:Meta) By signaling strategic pivots in AI talent and infrastructure investments, we are ready to focus on critical markets in expanding our AI initiatives.
The company’s aggressive push towards advanced AI development is to drive estimates of revenue and earnings per share for the upcoming quarter, despite the potential for rising operating expenses.
Bank of America Securities Analyst Justin Post repeated I’ll buy the rating With its $775 price forecast on Friday, the meta platform expects the company to feature a prominently feature the AI initiative, which will see its second quarter revenue calls growing.
Read again: Meta hits 1 billion AI users every month, with future subscriptions for eyes
POST highlights key developments, including the $14 billion investment in Meta’s scale AI, recent reports on delays on the Lama 4 model, and the formation of Meta’s dedicated super intelligence team, all highlighting their commitment to deepening their advanced AI development.
The metaplatform is expected to report strong second quarter revenues. We believe this will reduce concerns about its important AI spending.
He also focuses on the active recruitment of Meta’s top tier AI professionals, offering a competitive compensation package that can help increase operating expenses.
Post has raised its second-quarter estimates, surpassing its street estimates of $44.6 billion and $5.84 with revenue and GAAP EPS of $45.4 billion and $6.12 respectively. Analysts expect an 8% increase in advertising revenue, with Forex offering a positive tailwind. He focused on the buy-side expectations that will land between $45.5 billion and $46 billion, surpassing Meta’s high-end guidance of $42.5 and $45.5 billion.
For the third quarter, Post forecasts revenue of $46.9 billion and an EPS of $6.20, ahead of $45.9 billion and $5.91. Analysts hope that the meta will lead to the range of $4.4.5-47.5 billion and confirm that it continues to benefit from AI-driven improvements such as automated campaigns, CRM integrations, threads, WhatsApp and monetization across messaging.
The Post noted that despite the AI employment ramp, Meta has space for 2025 cost guides ranging from $113 to $118 billion. Analysts estimated $27.8 billion in second quarter costs, potentially higher CAPEX due to data center expansion and AI infrastructure needs.
Post is also expected to benefit from new tax laws and R&D credits, possibly improving free cash flow for 2025 by $4-500 million.
Analysts noted that meta is one of the most powerful long-term AI opportunities, with AI tools integrated into the AD stack, and significant revenues have risen.