TLDR
- Meta Q2 revenue rose 28% year-over-year to $60.8 billion, with ad revenue up 27%
- Q2 capex hit $31.1 billion, sending free cash flow down 91% to just $784 million
- Meta expects to spend $130 billion to $145 billion on capex in full-year 2026
- EPS of $6.18 missed the $7.19 consensus estimate; Q2 costs rose 55%
- Wall Street holds a “Moderate Buy” consensus with an average price target of $785.32
META stock opened at $568.97 on Tuesday, down around 3.5% on the day, and sits well below its 52-week high of $790.80.
Q2 revenue came in at $60.8 billion, up 28% year-over-year, beating analyst expectations of $60.22 billion. Advertising revenue drove most of that, rising 27%, as ad impressions grew 14% and the average price per ad climbed 12%.
Daily active users across Meta’s family of apps reached 3.6 billion in Q2. That gives its ad targeting systems a massive pool of users to work with.
But the earnings picture was not clean. EPS came in at $6.18, missing the consensus estimate of $7.19 by a dollar. Costs jumped 55% in the quarter, nearly twice the rate of revenue growth, which pushed operating margin down from 43% to 31%.
Capex Is the Story
The bigger concern for investors is the spending. Q2 capex hit $31.1 billion, which nearly wiped out the $31.9 billion in operating cash flow. That left free cash flow at just $784 million, a 91% drop.
For full-year 2026, Meta now expects capex of between $130 billion and $145 billion. That is a lot of infrastructure spending to justify.
Meta is not just building for internal use. It launched Muse Code with pay-as-you-go pricing, and Muse Spark is now available to developers through a paid API. Both moves signal an attempt to turn AI into a direct revenue line, not just a tool to boost ad performance.
Business Messaging Adds Another Layer
Meta Business Agent is another product in the mix. Over one million businesses were already using it on WhatsApp and Messenger as of June. Meta plans to add paid subscription tiers, which could eventually contribute to revenue if even a fraction of users convert.
The company currently hosts more than one billion active business conversations per day across its platforms.
Debt and legal exposure are also worth watching. Meta ended Q2 with $83.7 billion in long-term debt, offset by $90.3 billion in cash and marketable securities. It recorded $2.4 billion in legal charges during Q2, and management flagged upcoming U.S. youth-related trials as a potential material risk.
Reality Labs continued to weigh on results, posting a $4.62 billion loss on just $431 million in revenue for the quarter.
On the institutional side, Park National Corp OH raised its Meta position by 7.9% in Q2, bringing its total to 92,967 units valued at around $52.4 million. Institutional investors own 79.91% of META overall.
Robert W. Baird cut its price target from $830 to $750 but kept an outperform rating. DA Davidson trimmed its target from $850 to $700, also maintaining a buy. Wedbush set a neutral rating with a $595 target. The consensus across analysts stands at “Moderate Buy” with an average price target of $785.32.
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