Meta Platforms Continues Earnings Success, Boosts Analyst Optimism

Meta Platforms (NASDAQ: META) announced a strong earnings report on May 1, rewarding investors with a 4% increase in share price following the release. This success extended the company’s remarkable streak of beating Wall Street’s sales estimates for 11 consecutive quarters.

In addition to surpassing earnings expectations, Meta also exceeded adjusted earnings per share (EPS) estimates for the ninth quarter in a row. Historically, the company’s shares have risen by more than 5% on average after earnings reports over the last 10 quarters.

But share price appreciation was not the only factor driving investor enthusiasm. Research by MarketBeat shows that nearly 20 Wall Street analysts have raised their price targets for Meta. While some analysts lowered their targets, the number of increases was three times as high.

JPMorgan Highlights Meta’s Increased CapEx

One significant development was Meta’s decision to raise its capital expenditure (CapEx) guidance for 2025. The company is investing heavily in AI infrastructure to support its growth. Critics have often challenged large tech firms for their CapEx spending, yet Meta’s AI implementation has shown considerable benefits, particularly in its advertising operations. Observing this success, Wall Street analysts have reacted positively to Meta’s increased spending plans. Many attribute their raised price targets to these AI successes.

While higher CapEx means more cash outflow for Meta, analysts at JPMorgan Chase & Co. (NYSE: JPM) are optimistic. They referenced the company’s “solid results and execution along its AI roadmap” and its “ambitious long-term goals” to justify this increased spending.

Stifel analysts emphasized that Meta’s investment in artificial intelligence is crucial for future growth. Likewise, Piper Sandler stated that Meta’s AI initiatives are vital for the company’s ongoing success. They noted that the higher CapEx spending is focused on accelerating the development and rollout of essential technology. Truist Securities maintained that “Meta continues to justify its right to invest.”

Evidence of Meta’s strong AI execution can be seen in a rise in ad impressions across its platforms. From Q1 2023 to Q1 2025, ad impressions have surged by around 26%, indicating increased ad purchases. Similarly, the price per ad has increased by roughly 17%. Typically, higher prices suggest lower demand; however, Meta is managing to increase ad prices while simultaneously attracting higher demand, demonstrating the value marketers find in its platform.

Citi Applauds Clarity in Meta’s AI Strategy

Analysts at Citigroup (NYSE: C) noted another key aspect of Meta’s recent developments. For the first time, the company outlined five major growth opportunities from its AI strategy: improved advertising, more engaging experiences, business messaging, Meta AI, and AI devices.

This structured presentation boosted investor confidence in Meta’s growth trajectory. Clarity in business strategy often leads to a higher valuation, a dynamic that could benefit Meta if execution continues to meet expectations.

Analyst Targets Reflect Potential Upside for Meta

Average price target updates from Wall Street analysts, tracked by MarketBeat, suggest a promising return for Meta shares over the next 12 months. Based on the closing price of around $598 per share on May 8, these updates imply a potential upside of over 18%.

In sum, the increase in price targets for Meta largely reflects one crucial factor: the company’s success with its AI strategy. This approach is likely to reinforce investor confidence, aligning with broader market trends.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.