Meta’s Earnings Report Is Coming Up. Is It Time to Buy the Growth Stock?
With Meta Platforms (GOAL 1.85%) Scheduled to report its first-quarter outcomes for 2026 on Wednesday, April 29, buyers are probably taking an in depth take a look at the inventory.
At one level this yr, the tech large noticed its share worth pull again sharply as the market digested the firm’s mixture of spectacular top-line progress and staggering spending plans. But the inventory has recovered sharply extra not too long ago, rising as Meta’s earnings report approaches.
This backdrop — a powerful enterprise with distinctive momentum mixed with a heavy artificial intelligence (AI) funding cycle — makes Meta an intriguing inventory to consider.
So, is the inventory a purchase after its current run-up and forward of its upcoming earnings report?
Image supply: Getty Images.
Strong income, pressured income
Meta’s most up-to-date quarterly replace offers a very good view of the firm’s stress between income progress and spending.
Highlighting the firm’s spectacular enterprise momentum, Meta’s fourth-quarter income surged 24% yr over yr to $59.9 billion. And for the full yr of 2025, income elevated a powerful 22% to greater than $200 billion.
But income have been extra challenged.
Meta’s fourth-quarter internet revenue rose simply 9% yr over yr, considerably trailing its top-line progress — and its earnings per share elevated 11% to $8.88. Further, fourth-quarter working revenue rose solely 6% to $24.7 billion.
This hole between fast income progress and slower earnings progress displays the firm’s large spending because it chases alternatives in AI. Even extra, this spending stress will probably persist all through 2026, as the firm expects to ramp up its investments much more this yr.
The AI funding cycle
The important purpose behind the firm’s revenue stress, in fact, is Meta’s aggressive buildout of AI infrastructure — a headwind which will get even worse this yr.
In its fourth-quarter earnings launch, the firm units its 2026 capital expenditures steerage at an eye-popping $115 billion to $135 billion. This represents a dramatic step up from the $72.2 billion the firm spent in 2025, signaling a shift towards a way more capital-intensive enterprise mannequin — at the very least in the near-term.
But there is a good purpose for this spending. The firm believes AI will create vital alternatives for Meta — and it is already seeing the fruit of a few of its earlier investments in computing.
“We are now seeing a major AI acceleration,” Meta CEO Mark Zuckerberg defined to buyers throughout the firm’s fourth-quarter earnings name. “I expect 2026 to be a year where this wave accelerates even further on several fronts.”
He later added that the firm will “continue to invest very significantly in infrastructure to train leading models and deliver personal superintelligence to billions of people and businesses around the world.”
Management famous that it expects 2026 working revenue to solely be “above” 2025 ranges. This cautious steerage means that Meta’s earnings-per-share progress could also be restricted this yr as this heavy AI funding cycle unfolds.
Is it time to purchase?
But for buyers keen to watch for this large funding cycle to totally repay, this will likely nonetheless be a good entry level into the inventory.
As of writing, Meta shares commerce at a price-to-earnings ratio of about 29. This is not essentially an inexpensive valuation, however it would not look overly costly both — particularly when contemplating the firm’s huge attain of over 3.5 billion each day energetic customers throughout its apps. In addition, the firm is well-capitalized and might simply deal with a number of years of heavy funding. Not solely does Meta generate significance free cash flowhowever it additionally boasts about $82 billion in money and marketable securities.
Today’s Change
(-1.85%)$-12.72
Current Price
$675.83
Key Data Points
Market Cap
$1.7T
Day’s Range
$672.17 – $683.25
52wk Range
$479.80 – $796.25
Volume
244K
Avg Vol
16M
Gross Margin
82.00%
Dividend Yield
0.30%
Ultimately, Meta inventory seems like a pretty long-term purchase, particularly if the firm can sustain its sturdy income progress and if its substantial investments in AI present that they’re paying off.
With that stated, I’d hold the place very small.
The threat profile has merely elevated given the enterprise mannequin’s shift towards a extra capital-intensive mannequin. If the economic system slows or if these AI investments take longer than anticipated to generate a significant return, the inventory’s valuation leaves little or no room for error.
Overall, nonetheless, I believe the inventory seems enticing right here — significantly for buyers who imagine in Zuckerberg’s optimistic imaginative and prescient for constructing and monetizing an AI superintelligence. But buyers ought to watch the firm’s upcoming earnings report carefully to see how Meta’s large spending is affecting each its income and backside line.
