While Meta Platforms has shaped up to be good at monetizing artificial intelligence in consumer-facing advertising, some analysts question whether the company’s AI models have any applications beyond that.
When the social-media giant reports quarterly earnings on Wednesday after the closing bell, Wall Street will be looking for answers.
MoffettNathanson analyst Michael Nathanson said that while it’s “satisfying” to see a new AI product release in the form of Meta’s Muse Spark — a reasoning model developed by Meta Superintelligence Labs — he’s unclear about the business opportunities that the model could unleash.
“What can [Meta] and what will [Meta] do with it?” Nathanson asked.
While AI has improved the return on digital ad spending, Nathanson said Meta’s ability to make inroads beyond consumer-driven end markets is “open for debate.” He thinks the company will “probably not be a competitive player in enterprise (where Meta has never played).”
He also said that Meta needs to do a better job of explaining whether and how its capital-expenditure rate will lift returns. The company is planning up to $135 billion in capex spending this year.
Raymond James analyst Josh Beck is more optimistic about Meta’s AI prospects, albeit in the consumer space. He wrote in a note earlier this month that he believes the recent Muse model validates Meta Superintelligence Labs’ investments and puts the company in a good spot to capture a meaningful share of the agentic e-commerce market.
He also wrote that his early testing of the Muse-powered Meta AI chatbot was “impressive,” with strengths in galvanizing impulse shopping and helping with product discovery through queries like “find me accessories to go with this outfit.”
That said, Beck believes the company is still in an “awkward phase,” in which revenue growth is tempered by a “likely uptick” in capex as its AI investments continue to grow.
Shares of Meta fell 1.1% on Tuesday, but have still rallied 16% so far in April and are on pace for their best monthly gain since May 2025. In comparison, the Roundhill Magnificent Seven ETF has advanced 15.1% this month and the S&P 500 has gained 9.4%.
AI won’t be the only thing investors will be watching for in Meta’s report. Bernstein analyst Mark Shmulik expects the company to continue to contend with ongoing litigation, including suits over youth access to social media, which have weighed on the stock. He also notes that the company could be impacted by a decline in U.S. social-app downloads.
According to Sensortower and Bernstein analysis, Facebook and Instagram downloads in the U.S. were down 8% and 6%, respectively, in the in the first quarter of 2026 when compared to a year earlier.
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