Meta Platforms is heading into an earnings report with strong implications for the market’s AI narrative.

The social media giant, which will report its latest results after the closing bell on Wednesday, is among the AI ​​”hyperscalers” spending hundreds of billions on the technology, and such high spending isn’t being greeted with great enthusiasm by investors lately.

Last week he offered a preview of what could be in store for Meta if it surprises investors with the prospect of even higher-than-expected capital spending. Both Alphabet and Tesla were punished after they reported full-year spending numbers that topped Wall Street estimates, and shares sold off after the earnings.

Wall Street’s view on AI capital spending has changed dramatically since last year. In 2025, companies might not be spending enough on technology, but the winds have changed and investors are eager to see a return on investment. With Meta shares falling about 10% in 2026, investors are looking for a narrative-changing report that could reinvigorate enthusiasm around the social media company.

Here’s what major Wall Street firms are watching as Meta heads into its second-quarter earnings report.

bank of america

BofA analysts maintain a Buy rating with a bullish $835 price target on Meta shares, a 40% increase from Tuesday’s price. The bank forecasts better overall performance in the second quarter, with analyst Justin Post citing its attractive valuation and significant AI benefits as the main reasons its team remains constructive, as well as healthy advertising growth.

While they expect Meta to continue increasing AI spending numbers, Post said high capex doesn’t negatively impact his bullish thesis on the stock.

“We do not expect investment in AI infrastructure to slow in the near term given industry-wide computing capacity constraints and see potential for Meta to increase its FY26 capex guidance to $135-150 billion (from $125-145 billion),” he wrote. “We recently raised our FY26 capital spending estimate to $145 billion and continue to see upside potential to Street estimates of $136 billion.”

Goldman Sachs

Goldman also expects Meta to continue increasing capital spending on AI, but he’s not worried. According to analyst Eric Sheridan, Meta’s spending will reach $534 billion between 2026 and 2028 as it continues to monetize its AI computing development. The bank has a Buy rating on the stock and a bullish price target of $815, a 37% jump from current levels.

“We continue to see sustained operational momentum in terms of our advertising checks during the second quarter, which bodes well for its future growth trajectory,” he wrote. “We continue to see that the application of additional computing to the company’s core application family products is generally underestimated by investors.”

German Bank

Deutsche analyst Benjamin Black recently wrote that Meta should do more to scale its AI ambitions, rating the stock a Buy and setting a price target of $800.

Black did not give a specific capital spending forecast, although he wrote that spending will likely remain elevated. But like Goldman, he highlighted strong advertising growth and a promising AI monetization path as reasons to remain bullish on Meta.

“In our view, Meta’s stock’s modest discount to the broader market does not adequately reflect the durability of the advertising business or the growing optionality of monetization in AI, subscriptions, merchant agents and cloud infrastructure,” he wrote.

RBC Capital Markets

RBC views Meta as the tech stock with the greatest opportunity to improve investor sentiment. Analyst Brad Erickson maintains an Outperform rating and a $810 price target.

Erickson added that if management increases 2026 capital spending to the planned $215 billion, it would likely help position Meta as a competitive force in cloud infrastructure.

“The degree to which management articulates a clear path to commercialization (and demonstrates early traction or proof points) will be critical to validating the enormous capital investments being made and could help address lingering concerns about return on invested capital in the age of AI,” he noted.

NeedhamEdit

Needham is less optimistic, maintaining a Hold rating and a more moderate price target of $606, about 2% higher than current levels. Analyst Laura Martin said her team prefers to wait to buy Meta shares until the current capex cycle ends, citing concerns about its growth plans.

“We maintain our HOLD, because we believe that META’s dissemination strategy destroys economic value,” he wrote. “We believe META is asking for too much capital for too many projects, and since competition is intense, diluting the strategy reduces the chances of success in any of them.” He cited projects such as his Ray-Ban glasses, Metaverse and Reality Labs as having an uncertain future in terms of profitability.