Meta Platforms (META) and Microsoft (MSFT) are drawing attention ahead of their upcoming earnings, with top Guggenheim analysts maintaining Buy ratings on both stocks. While Meta continues to benefit from strong advertising momentum, Microsoft’s outlook appears more mixed heading into the print.
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Meta Ad Growth Stays Strong
Ahead of the print, Guggenheim analyst Michael Morris maintained a Buy rating on Meta with an $850 price target, implying 26% upside from current levels. He raised his Q1 2026 revenue growth forecast to 32.3%, above the 31.2% consensus.
This strength is largely driven by Meta’s ad business, where AI tools like Andromeda are improving performance and engagement. As a result, Morris expects this momentum to continue through 2026, with growth remaining above 23%.
At the same time, Meta is ramping up its investment in AI, with Guggenheim expecting 2026 capital expenditure to reach $115–$135 billion, implying about a 73% increase from last year. The firm believes this level of spending is already yielding a competitive product, even though it could weigh on cash flow in the near term.
Analyst Sees Mixed Outlook for MSFT Ahead of Earnings
For Microsoft, Guggenheim analyst John DiFucci reiterated a Buy rating and a $586 price target, implying 35% upside from current levels. He expects Microsoft to meet its Q3 FY26 revenue estimates, but sees some risk around its guidance for the next quarter.
The analyst believes Azure faces some downside risk in the near term due to high expectations, while Microsoft 365 Commercial remains on track. At the same time, Windows OEM could provide upside, supported by stronger PC demand. However, he expects the trend to shift in the next quarter, with Windows OEM facing pressure while Azure and M365 appear more stable.
He also noted that investors will closely watch commentary on data center capacity as a signal of AI demand, along with adoption trends for Microsoft 365 Copilot. At the same time, he cautioned that rising memory costs, higher depreciation, and geopolitical tensions could weigh on margins.
Which Mag 7 Stock Is the Better Buy?
According to TipRanks’ comparison tool, both Meta and Microsoft carry Strong Buy ratings from analysts, reflecting continued confidence in their AI-driven growth. However, Microsoft appears to offer slightly higher upside, with an average price target of $573.99, implying about 32.6% upside from current levels.
