Meta Platforms is poised to release its first-quarter earnings report after the market closes on Tuesday, April 29, with a conference call scheduled for 2:30 p.m. Pacific Time. The financial update arrives at a critical juncture for the social media giant, as stakeholders scrutinize the balance between its core advertising business and the substantial capital being deployed toward artificial intelligence infrastructure. The company's stock traded lower by approximately 2.3% during Monday's midday session, reflecting investor apprehension ahead of the report.
Analyst sentiment ahead of the print appears cautiously optimistic. Justin Post of BofA Securities anticipates Meta will surpass consensus estimates for the March quarter, projecting revenue of $56 billion and earnings per share of $7.44. These figures exceed the Street's average expectations of $55.4 billion in revenue and $6.64 EPS. While Post adjusted his price target downward to $820 from $885, he maintained a Buy rating on the stock, citing the company's ongoing discipline in managing operating expenses.
The broader investment thesis hinges on Meta's ability to translate its massive AI expenditures into tangible business improvements. In January, management provided full-year 2026 guidance, forecasting total expenses between $162 billion and $169 billion. Capital expenditures, primarily for data centers and servers to support AI development, are projected to range from $115 billion to $135 billion. Despite this significant outlay, the company reaffirmed its goal to deliver operating income that exceeds 2025 levels.
Meta's fourth-quarter 2025 performance set the stage for the current scrutiny. The company reported a 24% year-over-year revenue increase to $59.9 billion, but total expenses surged 40% during the same period. Advertising impressions grew 18%, while the average price per ad rose 6%. Chief Financial Officer Susan Li attributed the pricing strength to robust advertiser demand and enhancements in ad performance. Separately, Li noted that paid messaging on WhatsApp reached a $2 billion annual run rate in Q4, highlighting a newer revenue stream.
On the competitive front, Meta is gaining ground. According to eMarketer projections, the company is expected to overtake Alphabet's Google in global digital ad revenue for 2026, with estimates of $243.46 billion versus $239.54 billion for Google. This momentum is partly driven by growing advertiser adoption of Meta's Advantage+ automated advertising solutions. The company is also bolstering its AI hardware capabilities, having recently renewed and expanded its partnership with Broadcom through 2029 for custom AI chips, with an initial order exceeding one gigawatt of capacity.
Nevertheless, significant headwinds persist. Rising energy costs, particularly impactful for large-scale AI operations, are pressuring margins. Furthermore, Meta faces escalating regulatory challenges, especially in Europe. Last week, the European Commission announced intentions to compel Meta to re-enable rival AI assistants on its WhatsApp platform. The company has previously warned that mounting legal and regulatory risks in both the European Union and the United States could materially affect its financial results.
The April 29 earnings call will likely focus on one central question: Is Meta's AI spending beginning to yield measurable returns in the near term? Investors are seeking concrete evidence that these investments are already enhancing ad targeting, marketing efficiency, and product adoption—moving beyond mere long-term bets. A solid earnings beat coupled with a reaffirmed cost outlook would support the bullish case. Any deviation could quickly reignite concerns over profitability and margin compression as the company navigates this expensive technological transition.
