Key Points
-
Shares closed at $595.19, about 25% below the 52-week high of $796.25.
-
The stock trades at 22 times earnings, below the S&P 500’s multiple of about 28.5.
-
First-quarter revenue rose 33% year over year, an acceleration from 22% growth for all of 2025.
- 10 stocks we like better than Meta Platforms ›
Meta Platforms (NASDAQ: META) closed Friday at $595.19, back under $600 and about 25% below its 52-week high of $796.25. At that price, the social media company trades at about 22 times earnings — a lower multiple than the S&P 500‘s (SNPINDEX: ^GSPC) roughly 28.5. Meta reports second-quarter results after the close on Wednesday, July 29.
What the market is marking down, however, isn’t the advertising business.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
First-quarter revenue rose 33% year over year to $56.31 billion — an acceleration from the 22% growth Meta posted for all of 2025. Ad impressions across its apps climbed 19%, average price per ad rose 12%, and family daily active people averaged 3.56 billion, up 4%.
A business losing ground does not put up numbers like that.
Image source: Getty Images.
The markdown is about the spending. Meta raised its 2026 capital expenditure range to $125 billion to $145 billion in April, and it spent $19.84 billion in the first quarter alone, up from an initial range of $115 billion to $135 billion. Investors have watched that range move up once already, and they appear to be pricing in the chance of it moving again.
Affording the bill is easier to establish than earning a return on it. Even after the first-quarter outlay, Meta generated $12.39 billion of free cash flow in the period and finished with $81.18 billion in cash and marketable securities. Its full-year total expense outlook of $162 billion to $169 billion was left unchanged, which suggests the spending increase is landing on the balance sheet instead of the income statement for now.
Wednesday should settle two things.
Management guided second-quarter revenue to $58 billion to $61 billion. Against $47.52 billion in the same quarter last year, that range implies growth of 22% to 28%. That is a step down from the first quarter’s 33%, though a deceleration already sitting in guidance is less dangerous than one that arrives as a surprise.
Revenue near the top of that range would suggest the advertising engine is still taking share of a growing market while the multiple sits below the index. A capital spending range that moves higher again would tell investors the payback period keeps stretching, which is the specific worry this drawdown has been about since April.
The average price per ad tends to move first. It rose 12% in the first quarter, and better targeting usually shows up there before it reaches the revenue total.
Ultimately, a business compounding revenue north of 20% at about 22 times earnings isn’t priced for optimism. It’s priced for the possibility that the money going into AI (artificial intelligence) infrastructure may not come back on any schedule investors can underwrite. That possibility is worth something. But the advertising numbers so far argue that a 25% discount may be overdone.
Should you buy stock in Meta Platforms right now?
Before you buy stock in Meta Platforms, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!*
Now, it’s worth noting Stock Advisor’s total average return is 896% — a market-crushing outperformance compared to 206% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of July 26, 2026.
Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
