Meta Q1 Earnings Preview: Can Advertising Growth Support Massive AI Investments?
Publication Date: April 23, 2026
Meta Platforms is scheduled to report its first-quarter 2026 earnings on April 29, with a conference call to follow. Investors are keen to see if the company's advertising revenue, driven by artificial intelligence (AI), can support its substantial capital expenditures exceeding $115 billion.
Strong Baseline Following Q4 Beat
Meta enters this quarter with heightened expectations after a strong Q4 2025, where it reported revenues of approximately $59.9 billion and earnings per share (EPS) of $8.88, surpassing forecasts. This success was attributed to enhanced ad targeting and engagement across its platforms, including Facebook, Instagram, and WhatsApp, with AI playing a crucial role in monetization strategies.
Q1 Expectations Set High Bar
Analysts predict Q1 revenue of $55.46 billion, marking a 31% increase year-over-year, with advertising revenue expected to reach $53.93 billion (up 30%). Pre-tax profit is anticipated at $20.32 billion (up around 10%), and EPS is projected at $6.73, nearly 5% higher than Q1 2025. These figures indicate continued growth in Meta's advertising business, but the high expectations create pressure for the company to deliver.
Meta Analyst Ratings
Analysts from LSEG Data & Analytics rate Meta as a 'buy', with a long-term price target of $846.10, representing a 25% upside from current levels. TipRanks also gives Meta a 'strong buy' rating with a Smart Score of '9 Outperform'.
AI and Advertising at the Core
AI remains central to Meta's growth strategy, with tools like Advantage+ improving return on ad spend for businesses. The company is also expanding its AI capabilities beyond advertising, investing in in-house chips, smart glasses, and next-generation user experiences, which, while promising for long-term growth, come with significant upfront costs.
Rising Costs and Capital Expenditure
Investors will scrutinize Meta's cost trajectory, with full-year expenses projected between $162 billion and $169 billion and capital expenditures between $115 billion and $135 billion. While the investment strategy has garnered support, there is increasing concern about whether these costs are translating into revenue and profit growth.
What Investors Will Watch on April 29
Key indicators for the upcoming results include:
- Advertising revenue growth and pricing trends
- User engagement metrics across platforms
- Performance of AI-driven advertising products
- Operating margins in light of investment levels
- Forward guidance on revenue, costs, and AI spending
Management's commentary on the return on investment for AI will be critical, as investors seek evidence of effective spending. User growth remains vital, especially given the company's scale.
What the Results Mean for Investors
Meta approaches its Q1 earnings with strong momentum but faces challenges in balancing growth with investment. Demonstrating that AI-driven improvements can sustain advertising growth while maintaining margins will be crucial for bolstering investor confidence in its long-term strategy. The April 29 update will be pivotal in assessing whether Meta can continue delivering robust earnings while pursuing an aggressive AI expansion strategy.
Technical Analysis of the Meta Share Price
The Meta share price has increased about 2% year-to-date but is down nearly 30% from a year ago. It remains in a long-term uptrend, with support at the March low of $520.26. For a bullish reversal in April, a rise above the January high of $744.00 is necessary, potentially leading to a return to the 2025 record high near $800. Conversely, if earnings disappoint, support may be found between the February to early March lows of $628.28 to $626.78.