Meta Platforms (META) is heading into its first‑quarter earnings report, due on April 29, with a Hold rating from Benchmark analyst Mark Zgutowicz. The Top-rated analyst noted that while the tech giant continues to execute well, investors should brace for a reset in long‑term spending expectations.
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It is worth noting that Zgutowicz ranks 1,515 out of more than 12,206 analysts tracked by TipRanks. He has an overall success rate of 74% on Meta stock, with an average return per rating of 24.02% over a one-year timeframe.
Analyst Sees Lower Costs but Mounting Long‑Term CapEx Needs
The company recently announced a 10% reduction in workforce, effective May 20, along with cutting 6,000 open roles, a move the analyst believes will directly lower Meta’s expense outlook.
Zgutowicz expects Meta to trim its 2026 total expense outlook to roughly $159 billion-$164 billion, down from the current range of $162 billion to $169 billion. At the same time, he raised his 2026 operating income estimate to $89.4 billion, about 3% above consensus, reflecting stronger efficiency gains and continued advertising revenue performance.
A key driver is Meta’s AI‑powered ad engine. Management said its end‑to‑end AI ad solutions, particularly Advantage+, are now running at a $60 billion annualized pace, representing nearly 30% of total ad revenue. But the analyst warned that even with this momentum, Meta faces a massive capital spending burden ahead.
According to Zgutowicz, Meta is facing more than $750 billion in CapEx over the next five years as it builds data centers, custom chips, and AI infrastructure. With spending at that scale, he argued Meta needs to clearly explain how these investments will translate into long‑term revenue and profit growth.
The analyst also pointed to Meta’s new Muse Spark initiative as a positive step, but said it still lags behind leading frontier AI labs. He believes investors will be looking for clearer details on how Meta plans to close that gap.
Is Meta Stock a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Meta stock based on 39 Buys and six Holds assigned in the past three months. Further, the average META price target of $854.46 per share implies 27.38% upside potential.
