Meta Q2 beat seen; capex could hit $150B
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- Bank of America projects Meta Q2 revenue of $60.6 billion and EPS of $7.50, above consensus of $60.2 billion and $7.18, citing healthy ad growth and potential upside from May's workforce reductions.
- Meta may guide Q3 revenue to $60.5 billion–$63.5 billion, roughly 18%–24% year-over-year growth, while raising its capex outlook to $135 billion–$150 billion (up from $125 billion–$145 billion) on higher memory costs, BofA said.
- Meta could trim the top end of its expense guidance by $1 billion–$2 billion following the layoffs, according to BofA, even as investors press for clarity on monetization of newer AI bets like subscriptions and business agents.
- Bank of America raised its 2027 Meta revenue estimate by $5 billion to $316 billion (with $35 in EPS), citing potential AI capacity benefits from a reported compute deal with Anthropic.
- Meta shares have fallen roughly 24% since its Q3 2025 call—when the company first guided to a 2026 spending step-up—versus a 5% gain for the Nasdaq, per BofA.
- Wedbush Securities called the period an "air pocket stage," noting roughly $700 billion in Big Tech capex this year as investors question when elevated infrastructure spending will translate into stronger revenue growth.
- Meta is scheduled to report second-quarter results after markets close tonight, with investors focused on advertising improvements tied to AI model integration, Muse Spark, and potential external compute sales.
Why it matters: Meta's print after the bell is a litmus test for the roughly $700 billion Big Tech AI capex bill this year, with BofA modeling a revenue beat but a capex hike to as much as $150 billion and Wedbush flagging an "air pocket" between spending and returns. BofA's $5 billion bump to its 2027 Meta revenue estimate—now $316 billion—shows analysts still see structural AI demand, yet Meta shares have lagged the Nasdaq by roughly 29 percentage points since late 2025, leaving tonight's call the focal point for whether AI outlays begin showing up on the income statement.
