The advertising numbers will probably look fine. That’s not really the debate anymore.
Meta (META) reports Q2 2026 earnings after the close on Wednesday, July 29, 2026. Consensus revenue estimates sit near $60.2 billion, with EPS around $7.18 to $7.23.
Here’s the thing. The ad business is almost beside the point right now. What investors are really sitting with is a company that has spent most of 2026 defending a spending number that keeps growing and a stock that keeps selling off on it.
AI-related capital expenditures remain the dominant investor concern, with full-year 2026 guidance at a range of $125 billion to $145 billion. Meta stock has fallen about 9.7% year-to-date (as of the latest available trading day) and trades roughly 25% below its 52-week high of $796.25, reflecting anxiety over AI spending returns.
Slight tangent, but it matters: look at what Alphabet just did. Alphabet reported Q2 2026 capex of about $44.9 billion, and disclosed long-term debt of $98.2 billion as of June 30, 2026. That rattled the whole sector. Meta is now being judged by the same fear even though the financial profile is meaningfully different.
In Q1 2026, Meta produced $56.31 billion in revenue with ad impressions up 19% year-over-year and average price per ad up 12%. Family Daily Active People reached 3.56 billion. Operating margin was about 41%. Even after raising 2026 capex guidance to $125 billion to $145 billion, Meta generated about $12.4 billion in free cash flow in Q1. That is not a company bleeding out. That is a company funding a construction project from its own cash register.
The Number Most People Are Ignoring
Meta is in talks to lease AI computing capacity to Anthropic in an agreement that could be worth as much as $10 billion over two years. Meta also hired Dave Brown, a former senior Amazon Web Services executive, signaling the infrastructure ambitions go beyond a single deal.
Zuckerberg has framed external leasing as a potential offset if Meta builds more AI capacity than it needs internally. A $10 billion Anthropic deal would serve as a proof of concept for that thesis.
The start of Meta’s shift toward monetizing AI infrastructure appears to hinge on that proposed two-year, $10 billion deal with Anthropic. Some investors are watching for any update on the July 29 earnings call.
That’s the wildcard nobody has priced cleanly. If Zuckerberg announces a signed deal with Anthropic on the call, the entire framing around Meta’s capex flips. It stops being a cost and starts looking like a business model.
What the Market Is Pricing Right Now
With the stock trading at roughly 18 to 22 times forward earnings, this earnings report will either validate the AI investment thesis or deepen the market’s skepticism. The options market is pricing in a potential post-earnings swing of about 8%, signaling elevated expectations for volatility around the release.
The EPS outlook of approximately $7.23 implies about flat to low-single-digit year-over-year earnings growth versus Q2 2025’s diluted EPS of $7.14. That’s the number bears will point to. Bulls will counter that the margin compression is deliberate and temporary.
Three Things to Watch Tomorrow Night
- CapEx guidance update. Investors will scrutinize whether management reaffirms, adjusts, or further increases the $125 billion to $145 billion range.
- Ad pricing momentum. In Q1, ad impressions grew 19% and average pricing rose 12%. Any slowdown in either metric, especially in pricing, could signal weakening advertiser demand.
- Anthropic deal status. Q3 2026 guidance will be the most forward-looking data point. Whether management guides above or below analyst consensus will drive the immediate post-results market reaction more than the Q2 actuals themselves.
The part people keep skipping: Meta’s core business is in excellent shape. The stock is down because of what it is spending, not what it is earning. That gap between operational strength and price action is either a mispricing or a warning. Tomorrow night starts to answer that.
For informational purposes only.
