Meta shares have rallied 26.5% in the past month, but Benchmark analyst Mark Zgutowicz is sticking with a Hold rating ahead of Wednesday's Q1 earnings report, warning that cost discipline will determine whether the stock can hold its gains. The Benchmark analyst expects Meta management to lower its calendar year 2026 total expense guidance range to approximately $159 billion to $164 billion, down from the existing $162 billion to $169 billion range. Even with a potential reduction, operating expenses are projected to climb 41% year-over-year at the midpoint.
Meta reports after the closing bell April 29. Wall Street is forecasting earnings per share of $6.67 on revenue of $55.56 billion, representing 31.3% annual growth -- the fastest pace since Q2 2021 and a sharp acceleration from the 16.1% growth rate recorded in Q1 2025. The primary investor concern entering Wednesday's call isn't whether Meta will beat expectations -- it's what management says about capital allocation.
Meta has outlined plans for $60 billion to $65 billion in AI infrastructure spending for 2026, and any increase without corresponding revenue guidance improvements could trigger sell pressure. The stock's recent surge -- nearly hitting a 52-week low around $525 in late March before rebounding above $675 -- has been fueled by easing Middle East tensions and the release of Muse Spark, Meta's first closed-source AI model designed to compete with Google and OpenAI offerings.
Despite Benchmark's cautious stance, the broader analyst community is more bullish. A total of 45 Wall Street analysts give META a Strong Buy consensus rating, with an average price target of $854.46 -- roughly 26% above current levels.
Meta exceeded revenue forecasts last quarter by posting $59.89 billion, representing 23.8% annual growth, and has not missed sales expectations since Q2 2022 -- a streak spanning 14 quarters. But the spending question looms largest on Wednesday's call as investors look for proof that AI investments are translating into revenue rather than remaining in development stages.
