Meta Platforms (META) is expected to report Q2 revenue and earnings above Wall Street estimates, supported by healthy advertising growth, "workforce reduction" and benefits from artificial intelligence model integration, BofA Securities said in a report Monday.
The firm expects revenue of $60.6 billion and earnings per share of $7.50 per share, compared with consensus estimates of $60.2 billion and $7.18, respectively. Meta's "10% workforce reduction in May" and a 49% quarterly decline in job postings could provide additional earnings upside, the report said.
For Q3, the firm forecasts revenue of $63.5 billion and earnings of $7.22 per share and expects Meta to issue revenue guidance of $60.5 billion to $63.5 billion. The company could also lower the "high end" of its expense outlook by $1 billion to $2 billion, though rising "memory costs" may push its capital spending forecast to $135 billion to $150 billion, according to the report.
Following reports of a potential "compute deal" with Amazon.com-backed (AMZN) Anthropic, the firm integrated an additional $5 billion in projected 2027 revenue into its valuation model. As a result, the firm raised its total 2027 revenue expectation by 1% to $316 billion and lifted projected EPS to $35. An additional $11 billion in AI capacity revenues was added to 2028 estimates, according to the report.
BofA reiterated its buy rating and $835 price target on Meta Platforms.
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