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Shares of Meta Platforms (NASDAQ:META | META Price Prediction) are down 9% in early Thursday trading to $530 and change, after Meta’s Q2 2026 results released Wednesday after the close failed to calm concerns about the company’s ballooning AI investment bill.
The move follows a Wednesday close of $585.61 and extends what was already a rough year for Meta Platforms stock, which was down 11% year to date heading into the report. On a one-year basis, Meta Platforms shares are now off 16%.
Bottom-Line Miss and Soft Guide Trigger the Selloff
Meta Platforms delivered Q2 revenue of $60.8 billion, up 28% year over year and ahead of the $60.2 billion consensus. The company’s advertising revenue also came in ahead at $59.3 billion.
However, Meta Platforms’ diluted earnings per share (EPS) of $6.18 missed the $7.14 to $7.22 range, down 13% year over year. The company’s total costs and expenses jumped 55% to roughly $42 billion, including $2.4 billion in legal charges and $1.18 billion of severance tied to May’s headcount reduction.
Furthermore, Meta Platforms raised the low end of its 2026 capex range to $135 billion to $145 billion, and offered Q3 2026 revenue guidance of $61 billion to $64 billion, a midpoint below Wall Street’s expectations. Q2 capex of $31.08 billion shrank free cash flow to $784 million from roughly $8.6 billion a year earlier. Meta Platforms CEO Mark Zuckerberg told investors there’s “nowhere near enough compute for all the demand.”
Wall Street Slashes Meta Platforms Price Targets
Ten major firms cut their Meta Platforms price target overnight, though most kept bullish ratings. Barclays moved to $780 from $830 (Overweight), Bank of America to $810 from $835 (Buy), Citi to $800 from $850 (Buy), and Goldman Sachs to $725 from $815.
The cuts got sharper further down the list. Guggenheim went to $700 from $800, KeyBanc to $780 from $790, Piper Sandler to $785 from $800, UBS to $715 from $766, and Wells Fargo to $640 from $835. JPMorgan cut to $640 from $725 and remained the lone Neutral. The shared concern: limited visibility into monetizing AI compute spend beyond advertising, plus a growing capex, free-cash-flow, and return on invested capital (ROIC) overhang.
Hyperscaler Split: Microsoft Rewarded, Meta Platforms Punished
Microsoft (NASDAQ:MSFT) reported the same evening and MSFT stock is up 15% Thursday morning as investors reward tighter capex framing and clearer AI monetization. Alphabet‘s (NASDAQ:GOOGL) Google has faced similar capex pressure recently, with Alphabet stock down 5% over the past month even after a strong report last week.
On the picks-and-shovels side, NVIDIA (NASDAQ:NVDA) remains a direct beneficiary of the same hyperscaler capex the market is now scrutinizing. NVIDIA stock is up 2% Thursday morning.
Sector ETF exposure amplifies the read-through. The Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) carries META at 19.75% and Alphabet’s two share classes at a combined 19.15%, so nearly 38.90% of the fund sits in two names. The ETF is down 3% Thursday.
What Investors Can Watch Next
Investors can watch for whether META stock holds the $530 level. The Reality Labs loss of $4.62 billion on $431 million of revenue and the raised $130 billion to $145 billion full-year capex band leave little room for further disappointment. Position sizing in Meta Platforms stock should reflect that risk.
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