Meta Platforms (NASDAQ: META) closed Friday at $595.19, slipping back below $600 and sitting roughly 25% under its 52-week high of $796.25.
At that price, the social media giant trades at approximately 22 times earnings, a notably lower multiple than the S&P 500’s roughly 28.5.
Meta is scheduled to report second-quarter results after the close on Wednesday, July 29, a date investors are watching closely.
The discount does not appear to reflect weakness in Meta’s core advertising business, which continues to deliver strong growth figures.
First-quarter revenue rose 33% year over year to $56.31 billion, an acceleration from the 22% growth Meta posted across all of 2025.
Ad impressions across Meta’s apps climbed 19% during the period, while the average price per ad rose 12% and family daily active people averaged 3.56 billion, up 4%.
The concern driving the selloff centers on spending, not revenue, as Meta raised its 2026 capital expenditure range to $125 billion to $145 billion in April, up from an initial range of $115 billion to $135 billion.
Meta spent $19.84 billion on capital expenditures in the first quarter alone, and investors appear to be pricing in the risk that the spending range could move higher again.
Despite that outlay, Meta generated $12.39 billion of free cash flow in the first quarter and finished the period with $81.18 billion in cash and marketable securities.
The company left its full-year total expense outlook of $162 billion to $169 billion unchanged, suggesting the increased capital spending is landing on the balance sheet rather than squeezing the income statement for now.
Management guided second-quarter revenue to a range of $58 billion to $61 billion, implying growth of 22% to 28% against the $47.52 billion reported in the same quarter last year.
That growth rate represents a step down from the first quarter’s 33%, though a deceleration already embedded in guidance is considered less alarming than one that arrives without warning.
Revenue near the top of the guided range would signal that Meta’s advertising engine continues gaining share in a growing market while the stock still trades below the broader index multiple.
The average price per ad, which rose 12% in the first quarter, tends to move before gains show up in total revenue figures, making it a key metric to watch Wednesday.
A business compounding revenue north of 20% at roughly 22 times earnings is not priced for optimism, but rather for uncertainty over whether massive AI infrastructure investment will generate returns on any timeline investors can comfortably underwrite.
