Meta Reports $60.8 Billion Revenue Amid Rising AI Spending

Meta Platforms reported second-quarter revenue of $60.8 billion, marking a 28% increase from the previous year. The growth was primarily driven by a 27% rise in advertising revenue. Despite the top-line growth, net income fell 14% to $15.85 billion, and free cash flow dropped sharply to $784 million from $12.39 billion a year earlier due to heavy investments in artificial intelligence infrastructure.

The company narrowed its full-year 2026 capital expenditure forecast to a range between $130 billion and $145 billion. To offset these costs, Meta is diversifying its revenue streams through AI search, API revenue, and a "neocloud" service that rents computing capacity. The company also intends to launch subscription and usage-based pricing for its Business Agent during the second half of 2026.

Mark Zuckerberg noted that the company is receiving offers for its compute capacity at a significant premium, although the firm is prioritizing higher margins through its own AI products. Morgan Stanley maintained an Overweight rating on the stock with a $775 price target, suggesting that the current market price accounts for spending but not the potential value of upcoming products.