Meta Platforms (NASDAQ:META) Trading Down 1.3% Following Weak Earnings

Key Points

• Meta shares fell 1.3% after quarterly EPS came in at $6.18, well below the $7.13 consensus estimate, although revenue of $60.80 billion slightly exceeded expectations.
• Investors remain focused on Meta’s rapidly rising AI spending, which could reach $125 billion–$145 billion annually and pressure margins and free cash flow without clear AI-related revenue. A potential BlackRock partnership and possible AI-compute leasing to Anthropic could help offset those costs.
• Despite the earnings miss and spending concerns, analyst sentiment remains broadly positive, with a “Moderate Buy” consensus rating and an average price target of $835.64 versus the reported trading price near $585.61.

Meta Platforms, Inc. (NASDAQ:META - Get Free Report) shares traded down 1.3% on Wednesday following a weaker than expected earnings announcement. The company traded as low as $582.22 and last traded at $585.61. Approximately 19,021,702 shares changed hands during mid-day trading, an increase of 14% from the average daily volume of 16,672,057 shares. The stock had previously closed at $593.41.

The social networking company reported $6.18 EPS for the quarter, missing the consensus estimate of $7.13 by ($0.95). Meta Platforms had a net margin of 32.84% and a return on equity of 36.93%. The business had revenue of $60.80 billion during the quarter, compared to analysts' expectations of $60.22 billion.

Meta Platforms Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, June 25th. Stockholders of record on Monday, June 15th were given a dividend of $0.525 per share. This represents a $2.10 annualized dividend and a dividend yield of 0.4%. The ex-dividend date of this dividend was Monday, June 15th. Meta Platforms's dividend payout ratio is currently 7.63%.

Key Meta Platforms News

Here are the key news stories impacting Meta Platforms this week:

• Positive Sentiment: Analysts expect Meta to exceed consensus estimates, citing healthy advertising demand, rising impressions, user engagement and improving AI-powered ad targeting. Bank of America forecasts $60.6 billion in revenue and $7.50 in earnings per share, above consensus estimates of $60.2 billion and $7.18. Meta expected to beat Q2 estimates as AI investments meet investor scrutiny
• Positive Sentiment: Meta’s partnership with BlackRock to develop a roughly $14 billion, one-gigawatt El Paso data center could reduce the immediate burden of its AI capital expenditures by bringing in outside financing. Meta is expected to retain operating access while holding a minority stake in the project. Meta, BlackRock partner on $14 billion El Paso data center
• Positive Sentiment: Potentially significant new revenue could come from early discussions to lease approximately $10 billion of AI computing capacity to Anthropic, offering a possible way to monetize Meta’s infrastructure investments beyond advertising. Meta in early talks to lease AI compute to Anthropic
• Neutral Sentiment: Traders are pricing a sizable post-earnings move, making the results, forward guidance and capital-expenditure outlook more important than the quarterly beat alone. Investors are particularly focused on whether Meta can show direct AI monetization and continued strength in its core advertising business. Expected Meta post-earnings move
• Neutral Sentiment: Analyst sentiment remains favorable: Erste Group raised its fiscal 2027 EPS estimate to $35.13 from $34.92, while Guggenheim reaffirmed a Buy rating with an $800 price target.
• Negative Sentiment: Investors remain concerned that Meta’s AI spending may continue rising toward $125 billion–$145 billion annually, pressuring margins and free cash flow without a clearly established AI revenue stream. Meta AI spending concerns
• Negative Sentiment: Broader risk-off trading, higher oil prices, uncertainty about the Federal Reserve’s interest-rate decision and renewed concerns about cheaper AI models are weighing on large technology stocks, including META.
• Negative Sentiment: Zuckerberg’s support for open AI models and opposition to restricting Chinese systems may encourage innovation, but it could create geopolitical and regulatory friction with Washington. Meta also faces ongoing social-media litigation and reported insider selling under a pre-arranged trading plan.

Analysts Set New Price Targets

META has been the subject of several recent analyst reports. Piper Sandler assumed coverage on Meta Platforms in a research note on Tuesday, June 2nd. They set an "overweight" rating for the company. Rosenblatt Securities reiterated a "buy" rating and issued a $1,015.00 price target on shares of Meta Platforms in a research note on Thursday, May 28th. JPMorgan Chase & Co. reissued a "neutral" rating and set a $725.00 price objective (down from $825.00) on shares of Meta Platforms in a report on Thursday, April 30th. Wells Fargo & Company boosted their price objective on shares of Meta Platforms from $767.00 to $835.00 and gave the stock an "overweight" rating in a research report on Tuesday, July 21st. Finally, Mizuho lowered their target price on shares of Meta Platforms from $850.00 to $835.00 and set an "outperform" rating for the company in a report on Tuesday, May 5th. Five research analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $835.64.

Insider Transactions at Meta Platforms

In other Meta Platforms news, COO Javier Olivan sold 837 shares of the business's stock in a transaction that occurred on Monday, July 20th. The stock was sold at an average price of $645.85, for a total value of $540,576.45. Following the completion of the sale, the chief operating officer owned 7,127 shares in the company, valued at approximately $4,602,972.95. The trade was a 10.51% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Robert M. Kimmitt sold 500 shares of the stock in a transaction that occurred on Wednesday, July 1st. The shares were sold at an average price of $607.75, for a total value of $303,875.00. Following the completion of the sale, the director directly owned 3,443 shares of the company's stock, valued at $2,092,483.25. The trade was a 12.68% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 37,859 shares of company stock valued at $23,087,979. Insiders own 13.53% of the company's stock.

Institutional Trading of Meta Platforms

Several institutional investors and hedge funds have recently bought and sold shares of META. Keybank National Association OH lifted its holdings in shares of Meta Platforms by 15.7% during the 4th quarter. Keybank National Association OH now owns 133,798 shares of the social networking company's stock worth $88,319,000 after acquiring an additional 18,169 shares during the period. WMS Group LLC purchased a new stake in Meta Platforms in the fourth quarter valued at approximately $876,000. Consolidated Investment Group LLC grew its holdings in Meta Platforms by 61.2% in the fourth quarter. Consolidated Investment Group LLC now owns 7,900 shares of the social networking company's stock valued at $5,215,000 after purchasing an additional 3,000 shares during the period. Vanguard Group Inc. increased its position in Meta Platforms by 3.8% during the fourth quarter. Vanguard Group Inc. now owns 199,995,630 shares of the social networking company's stock worth $132,015,115,000 after purchasing an additional 7,269,279 shares during the last quarter. Finally, Third View Private Wealth LLC acquired a new position in Meta Platforms during the fourth quarter worth approximately $27,789,000. Hedge funds and other institutional investors own 79.91% of the company's stock.

Meta Platforms Stock Performance

The company has a quick ratio of 2.35, a current ratio of 2.35 and a debt-to-equity ratio of 0.24. The company has a market cap of $1.48 trillion, a PE ratio of 21.29, a P/E/G ratio of 1.00 and a beta of 1.25. The stock's 50 day simple moving average is $603.98 and its two-hundred day simple moving average is $624.67.

About Meta Platforms

Meta Platforms, Inc NASDAQ: META, formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.

Meta's core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.

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