Meta Slipped Back Below $600 Before Wednesday’s Report. It Now Trades at About 22 Times Earnings. Here’s What Investors Should Know.

Meta Platforms (META -1.80%) closed Friday at $595.19, back under $600 and about 25% below its 52-week high of $796.25. At that price, the social media company trades at about 22 times earnings — a lower multiple than the S&P 500‘s (^GSPC +0.05%) roughly 28.5. Meta reports second-quarter results after the close on Wednesday, July 29.

What the market is marking down, however, isn’t the advertising business.

First-quarter revenue rose 33% year over year to $56.31 billion — an acceleration from the 22% growth Meta posted for all of 2025. Ad impressions across its apps climbed 19%, average price per ad rose 12%, and family daily active people averaged 3.56 billion, up 4%.

A business losing ground does not put up numbers like that.

Image source: Getty Images.

The markdown is about the spending. Meta raised its 2026 capital expenditure range to $125 billion to $145 billion in April, and it spent $19.84 billion in the first quarter alone, up from an initial range of $115 billion to $135 billion. Investors have watched that range move up once already, and they appear to be pricing in the chance of it moving again.

Affording the bill is easier to establish than earning a return on it. Even after the first-quarter outlay, Meta generated $12.39 billion of free cash flow in the period and finished with $81.18 billion in cash and marketable securities. Its full-year total expense outlook of $162 billion to $169 billion was left unchanged, which suggests the spending increase is landing on the balance sheet instead of the income statement for now.

Wednesday should settle two things.

Today’s Change

(-1.80%) $-10.90

Current Price

$595.20

Key Data Points

Market Cap

$1.5TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day’s Range

$594.60 – $609.93

52wk Range

$520.26 – $796.25

Volume

580.6K

Avg Vol

18.2M

Gross Margin

81.94%

Dividend Yield

0.35%

Management guided second-quarter revenue to $58 billion to $61 billion. Against $47.52 billion in the same quarter last year, that range implies growth of 22% to 28%. That is a step down from the first quarter’s 33%, though a deceleration already sitting in guidance is less dangerous than one that arrives as a surprise.

Revenue near the top of that range would suggest the advertising engine is still taking share of a growing market while the multiple sits below the index. A capital spending range that moves higher again would tell investors the payback period keeps stretching, which is the specific worry this drawdown has been about since April.

The average price per ad tends to move first. It rose 12% in the first quarter, and better targeting usually shows up there before it reaches the revenue total.

Ultimately, a business compounding revenue north of 20% at about 22 times earnings isn’t priced for optimism. It’s priced for the possibility that the money going into AI (artificial intelligence) infrastructure may not come back on any schedule investors can underwrite. That possibility is worth something. But the advertising numbers so far argue that a 25% discount may be overdone.