Meta Earnings Updates: Analysts Eye AI Plans, With Stock up 20% in 2025

Needham had a mixed view of Meta headed into its second-quarter earnings.

On the one hand, the firm’s analysts upgraded their rating for the stock from “Underperform” to “Hold,” citing two positive catalysts:

Rising revenue. “Based on our channel checks, we expect META to over-deliver on our prior rev and margin estimates for 2Q25 and FY 25,” the analysts said, estimating that Meta would post 14% revenue growth and 6% earnings per share growth for the year.High productivity. Meta’s business could be more productive than other mega-cap tech firms, with the company scoring the highest on free cash flow relative to labor costs in 2024.

Still, the firm sees a few risks ahead that held it back from rating the stock a “buy.”

Those include pressure on Meta’s margins and free-cash flow, potentially higher-than-expected total labor costs due to stock-based compensation, and Meta’s use of several strategies in its business, which “wastes capital and adds risks,” analysts said.

Oppenheimer said it sees a handful of risks looming for Meta stock.

Meta could struggle to innovate its AI features. “Scout” and Maverick,” the company’s latest AI models for Llama 4, “have dramatically trailed peers,” Oppenheimer said.Investors could sell Meta stock to divert proceeds to new tech IPOs.Meta’s ads could become less effective if privacy restrictions make it difficult for the company to track user dataThe company faces competition from the likes of Google, Microsoft, Pinterest, Twitter, and TikTok.

Oppenheimer reiterated its “Outperform” rating on the stock and lifted its price target to $775 a share, implying 9% upside from current levels.

Bank of America called Meta a “Top Online ad stock” for 2025 in a note this month.

That’s because the company looks best-positioned to reap the benefits from AI-driven advertising, analysts wrote, which they believe could support a higher valuation for the stock.

In a separate note, analysts said they expected Meta to beat consensus estimates for second-quarter earnings, pointing to positive checks the bank conducted on Meta’s advertising business. Revenue could come in around $45.5 billion, they estimated, at the higher end of Meta’s guidance for the quarter.

The bank reiterated its “Buy” rating on Meta. Earlier this month, it lifted its price target for the stock to $775 from $765, which implies 9% upside from current levels.

Second Quarter

Revenue estimate $44.83 billionEPS estimate $5.89Advertising rev. estimate $44.07 billionFamily of Apps revenue estimate $44.4 billionReality Labs revenue estimate $386 millionOther revenue estimate $502.4 millionOperating income estimate $17.24 billionFamily of Apps operating income estimate $22.16 billionReality Labs operating loss estimate $4.86 billionOperating margin estimate 38.3%Ad impressions estimate +6.91%Average price per ad estimate +7.58%Average Family service users per day estimate 3.42 billion

Third Quarter

Revenue estimate $46.21 billionCapital expenditure estimate $17.78 billion

Full year

Total expenses estimate $114.01 billionCapital expenditure estimate $67.79 billion

Source: Bloomberg data