Meta Platforms (META)
One of the most profitable advertising businesses ever built, currently spending an extraordinary amount of that profit on artificial intelligence. The valuation question is no longer about advertising.
The business
Meta owns Facebook, Instagram, WhatsApp and Threads, and sells advertising against the attention of roughly 3.6 billion daily users. Advertising was $59.4bn of $60.8bn of Q2 2026 revenue — this is an advertising company with other projects attached.
Reality Labs, the headsets and glasses division, contributed $431m. The rest is the AI buildout, which currently costs far more than it earns.
The numbers that matter
All figures as reported on the dates shown. Nothing on this page updates with the share price — the live valuation sits in the app.
| Measure | Latest reported | |
|---|---|---|
| Q2 2026 revenue | $60.8bn | +28% |
| Advertising revenue | $59.4bn | +27% |
| Diluted EPS | $6.18 | missed ~$7.22 consensus |
| Quarterly capital spending | $31.1bn | from $17.0bn a year earlier |
| Free cash flow | $784m | down about 91% |
| Daily active people | 3.60bn | +3% |
| 2026 capex guidance | $130-145bn | from $72.2bn in 2025 |
The moat
Genuine and unusually strong. Network effects mean each additional user makes the platform more valuable to everyone else, and the alternative to being on Instagram is not being where your friends are. Switching costs are social rather than technical, which makes them durable.
Meta also owns the measurement layer advertisers depend on, and it converts scale into targeting accuracy no smaller network can match. Q2 2026 ad impressions rose 14% while average price per ad rose 12% — selling more and charging more at once is what pricing power looks like.
What to check before you value it
Whether the advertising business is still compounding
It is, and it accelerated: ad revenue up 27% with both volume and price rising. The EPS miss was about costs, not demand. Those are separate stories and most coverage merged them.
Free cash flow, not net income
Free cash flow fell about 91% to $784m as $31.1bn of quarterly capex consumed nearly all operating cash flow. A company can look highly profitable while generating almost no cash.
Whether the AI spending earns a return
2026 capital spending is guided at $130-145bn against $72.2bn in 2025. Meta has no large cloud business to sell that capacity into, unlike Microsoft, Amazon or Alphabet. This is the central question in the valuation.
Legal and regulatory exposure
Q2 2026 included $2.4bn of charges related to legal proceedings. The CFO flagged youth-related trials scheduled in the US that may result in a material loss. That is the company's own language, not a critic's.
Recent filings
Dated announcements only. Figures below were reported on the dates shown and are not updated as the share price moves.
How Oak Growth scores it
Oak Growth runs a discounted cash flow on Meta Platforms and publishes the assumptions behind it — the discount rate, the growth rate and the terminal value — alongside a margin of safety against the live price. It also scores the company on the four pillars: moat, management, economics and value, in that order, because price comes last. The live figures sit in the app rather than on this page, so nothing here goes stale.
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Try Oak Growth — 7-day free trialCommon questions
Why did Meta's shares fall despite revenue growth?
Revenue beat expectations at $60.8bn but earnings per share of $6.18 missed consensus of roughly $7.22, because total costs rose 55%. Free cash flow fell about 91% to $784m as capital spending of $31.1bn absorbed nearly all operating cash flow. The advertising business accelerated; the cash generation did not.
How much is Meta spending on AI?
Capital expenditure guidance for 2026 is $130-145bn, against $72.2bn in 2025. Quarterly capex in Q2 2026 was $31.1bn, more than double the $17.0bn a year earlier.
What is Meta's economic moat?
Network effects. The value of the platform to each user rises with the number of other users, and the alternative to being present is social absence rather than an inferior product. Combined with scale-driven ad targeting, this produced 14% impression growth alongside 12% price growth in Q2 2026.
What legal risks does Meta face?
The company recorded $2.4bn of charges related to legal proceedings in Q2 2026, and its CFO stated that youth-related matters, including US trials scheduled for the year, may ultimately result in a material loss.
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