Should You Buy Meta Platforms Stock Before July 30?

Core Viewpoint - Meta Platforms is experiencing strong operating performance driven by investments in AI, leading to stock trading near record highs and expectations for a robust second-quarter financial report [2][8]. Group 1: AI Impact on Business - Meta has become a leading platform for advertisers, reaching over 3.4 billion daily users across its social media platforms, which enhances its advertising revenue [4]. - The company has developed an AI algorithm that personalizes content for users, resulting in a 6% increase in time spent on Instagram and a 7% increase on Facebook over six months [5]. - Meta AI, launched in 2023, has nearly 1 billion monthly active users, showcasing its rapid adoption and effectiveness [6]. Group 2: Financial Performance - In Q1 2025, Meta reported total revenue of $42.3 billion, a 16% increase year-over-year, and earnings per share (EPS) of $6.43, up 37% [8]. - Management guidance suggests Q2 revenue will be between $42.5 billion and $45.5 billion, indicating continued growth [8]. - Wall Street estimates predict an EPS of around $5.84 for Q2, reflecting a more modest increase of approximately 13% due to significant AI investments [9]. Group 3: Capital Expenditures and Future Outlook - Meta plans to spend between $64 billion and $72 billion on AI infrastructure and chips in 2025, an increase from previous estimates [10]. - This capital expenditure may impact short-term earnings but is expected to drive long-term growth as AI investments mature [11]. - An increase in the capex forecast could signal management's confidence in AI's transformative potential for the business [11]. Group 4: Investment Considerations - Meta's current price-to-earnings (P/E) ratio is 28.3, making it cheaper than the Nasdaq-100 index at 32.3, positioning it as an attractive investment [12]. - The stock is considered a good buy ahead of the upcoming financial report, especially for long-term investors [14].