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Artificial intelligence is likely to be the top investing theme this week as tech heavyweights like Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Meta Platforms (META) release their earnings for the June quarter. While the AI trade looked dusty a few months ago and markets began questioning whether we were in a bubble that had already burst, the AI trade is back, and with a vengeance.
AI mania has helped catapult Nvidia (NVDA) into a $4 trillion behemoth – the first ever company to get that distinction. On the other side of the spectrum is Apple, which is down more than 14% this year amid growing perception that the iPhone maker slacked big time on AI.
Notably, the “AI is a bubble” narrative was shattered by Meta during its Q1 2025 earnings call, in which the company explained how it is benefiting from AI and announced an increase in capex related to its investments in data center.
The Facebook parent will release its Q2 earnings on Wednesday, July 30, after the close of markets. All eyes will be on management’s AI commentary during the earnings call. In this article, we’ll look at Meta’s Q2 earnings estimates and examine whether the stock is a buy ahead of the confessional.
Meta Q2 2025 Earnings Preview
Analysts expect Meta to report revenues of $44.79 billion in Q2, a year-over-year rise of 14.6%, and within the $42.5 billion to $45.5 billion that the company guided for. I believe, given the strength in the digital ad market as was highlighted by Alphabet’s (GOOG) Q2 earnings, and the tailwinds from a weaker dollar, Meta should report buoyant revenues for Q2.
Consensus estimates call for Meta’s Q2 earnings per share to rise nearly 13% YoY to $5.83. Notably, given the increased outlay toward AI capex, tech companies are set to see a surge in their depreciation expenses, which will take a toll on the bottom line. However, Meta should be able to offset some of the impact through ongoing cost cuts.
What to Watch in Meta’s Q2 Earnings Call
During Meta’s Q2 earnings call, we will get to hear more about the recent AI talent headhunting that the Mark Zuckerberg-led company has done. Moreover, the company might talk about its investment in Scale AI, in which it took a 49% stake last month, hiring its founder, Alexandr Wang, along with other key employees in the process. While we might not get specifics, Meta might also talk about its future M&A plans.
I will be particularly watching out for color on the Superintelligence Labs unit that Meta has created, and how the models that it will develop will be differentiated from the Llama models that the company has been developing.
There could also be discussion of the company’s AI glasses, as that segment could now see more activity and competition following OpenAI’s acquisition of Jony Ive’s startup, io Products, which is rumored to be working on a hardware platform, likely glasses.
Meta Stock Forecast Heading into Q2 Report
Sell-side sentiment toward Meta is getting incrementally bullish heading into the Q2 report, and analysts have been raising the stock’s target price in a literal frenzy this month. Benchmark, Scotia Bank, Stifel Nicholas, KeyCorp, Morgan Stanley, JPMorgan, and Cantor Fitzgerald are among the brokerages that have raised Meta’s target price in recent days. Needham, which has had an “Underperform” rating on Meta since 2022 over concerns over growing capex towards AI and the metaverse, upgraded the stock by one notch to a “Hold.” The brokerage is, however, still on the sidelines as it is apprehensive about the return on investment that Meta will see from its capex, which is growing the fastest among all so-called hyperscalers.
Is Meta Stock a Buy Ahead of the Q2 Report?
While Meta is up a cool 22.6% for the year, the stock has been flat over the last month. Markets will look for more clarity on Meta’s AI strategy during the upcoming earnings call, as while the AI trade is back, investors are still wary of companies increasing their AI investments significantly. The trend was on full display in GOOG’s price action following Alphabet’s Q2 earnings. The stock rose only slightly despite what was otherwise a stellar report.
The setup for Meta looks good heading into the confessional, and upbeat commentary from Zuckerberg could help propel the shares higher. That said, while it’s a risky exercise to bet on post-earnings price action, I remain bullish on Meta as the company positions itself for the next leg of growth driven by AI and the metaverse.
