Meta Stock Price Forecast - NASDAQ:META Holds $710 as AI CapEx Soars Toward $100 Billion, EPS Beats 22%, and Revenue Surges to $47.5 Billion

Meta Platforms (NASDAQ:META) — Ad Strength, AI Expansion, and the $1.79 Trillion Question

Meta’s Market Performance and Scale

Meta Platforms (NASDAQ:META) closed at $710.56 on October 3, down 2.27% for the day and roughly 6% below its September post-earnings highs. Despite the short-term softness, the stock remains up over 21% year-to-date, outperforming the S&P 500’s 14.1% gain and securing a $1.79 trillion market capitalization. The company now trades at a forward P/E of 24.6, a multiple that places it cheaper than several peers in the “Magnificent 7,” including NVIDIA (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT), yet still reflecting premium growth expectations. With revenue of $178.8 billion and net income of $71.5 billion over the trailing twelve months, Meta’s 40% profit margin and return on equity of 40.6% underline the company’s dominance in digital advertising and its ability to scale profitability amid heavy AI spending.

Q2 Performance: A Record Quarter in Growth and Margins

Meta’s second-quarter revenue surged 22% year-over-year to $47.52 billion, surpassing analyst estimates of $44.84 billion by nearly $2.7 billion. The company’s ad ecosystem showed renewed acceleration, with global ad impressions up 11%, doubling from 5% growth in Q1. Meanwhile, the average price per ad climbed 9%, with North America leading at 11%, driven by strong advertising demand on Instagram Reels and Facebook Stories. These factors propelled operating income up 38% year-over-year to $20.44 billion, translating into a 43% operating margin, one of Meta’s highest since 2021. Earnings per share jumped 38% to $7.14, beating Wall Street’s estimate of $5.86 by more than $1.28 — a 22% upside surprise.

The company’s Family of Apps, which includes Facebook, Instagram, Messenger, and WhatsApp, reached 3.48 billion daily active people, an increase of 6%, adding nearly 50 million users in a single quarter. This continued engagement growth defied expectations of saturation and confirmed Meta’s grip on global digital attention.

AI-Driven Ad Innovation and Monetization Engine

CEO Mark Zuckerberg emphasized that AI-enhanced ad targeting and creative optimization were key growth drivers. The company’s new AI recommendation models reportedly increased ad conversion efficiency by 5% on Instagram and 3% on Facebook. AI integration has also expanded across Meta’s ad delivery systems, with advanced machine-learning models leveraging longer engagement context and more data signals. These improvements directly support Meta’s $100 billion advertising business and are central to sustaining its high margins.

Beyond advertising, Meta’s subscription-based ad-free plans—priced at £2.99/month in the UK and €5.99 in the EU—are gaining traction. Initially launched to comply with EU privacy rules, the ad-free tier could evolve into a recurring revenue channel, particularly if extended to the U.S. and Asia. This initiative highlights Meta’s attempt to diversify beyond advertising while maintaining user retention.

Meta Superintelligence Labs and Generative AI Investments

The next growth pillar is AI. Meta’s Superintelligence Labs (MSL)—led by former GitHub CEO Nat Friedman and Scale AI founder Alexandr Wang—aims to develop next-generation Llama models and deploy AI-first user experiences across products. The recently launched “Vibes” platform, Meta’s AI-generated content feed, marks the company’s first visible move into generative entertainment. While initial feedback has been mixed, engagement metrics hint at potential adoption similar to early Facebook Feed rollouts.

Meta’s massive capital investments reflect this AI push. The company guided FY2025 CapEx between $66–$72 billion, nearly equal to its annual operating income. For 2026, capital spending is projected to climb toward $100 billion, indicating unprecedented infrastructure expansion—primarily data centers and AI training hardware. Although this spending weighs on near-term free cash flow, it underscores Meta’s determination to dominate AI infrastructure ownership rather than rely on external cloud providers.

Free cash flow currently stands at $31.99 billion, while operating cash flow remains robust at $102.3 billion, showing the firm’s ability to self-finance aggressive expansion without increasing leverage. Meta holds $47.07 billion in cash against $49.56 billion in total debt, maintaining a low 25.4% debt-to-equity ratio.

Valuation, EPS Outlook, and Market Expectations

Analysts project FY2025 EPS of $28.16, rising to $30.05 in FY2026, implying 6.7% annual earnings growth on 16% revenue expansion. Based on current prices, Meta trades at 24.6x FY2026 P/E, below historical averages for its growth rate. Wall Street’s median 12-month target stands at $867.14, suggesting 22% upside from current levels. Forecasts range from $658 on the low end to $1,086 on the high end, reflecting mixed views about how much AI investments will pressure margins in the near term.

A detailed EPS growth reverse-engineering analysis suggests the market is pricing 12.7% real EPS growth over the next decade—an aggressive yet plausible expectation given Meta’s moat in digital advertising, its unique data advantage, and cross-platform network effects. With revenues expected to reach $228.3 billion in 2026, and margins likely moderating slightly as capex ramps, Meta remains one of the few mega-cap techs capable of sustaining high double-digit earnings growth.