Here is the thing about Meta’s earnings tonight: the ad business is almost certainly fine. That is not really the debate anymore.
What the market is actually pricing is whether Mark Zuckerberg is building the world’s most profitable advertising company into something bigger, or just setting a pile of cash on fire at a historically impressive scale.
The numbers going in are hard to argue with. Q1 revenue hit $56.31 billion, up 33% year over year. Ad impressions jumped 19%. Price per ad climbed 12%. Daily active users across the Family of Apps reached 3.56 billion, up 3.8% annually. That is not a business in trouble. That is a machine.
For Q2, consensus estimates sit around $60.2 billion in revenue, up roughly 26.7% year over year, with EPS expected near $7.18. Meta has topped revenue estimates for 15 consecutive quarters and beaten EPS expectations in 13 straight. The bar for a beat is not the story.
The story is the $145 billion.
Meta raised its 2026 capital expenditure guidance to a range of $125 billion to $145 billion, nearly double the roughly $72 billion it spent last year. That level of spending pressed the stock earlier this year. The market then recovered as a new angle emerged: Bloomberg reported Meta is developing a cloud computing platform, Meta Compute, that would rent AI infrastructure to outside customers. Shortly after, reports surfaced that Anthropic is in early talks to lease compute capacity from Meta in a deal potentially worth up to $10 billion over two years.
If confirmed on tonight’s call, that deal changes the math. It would represent one of the first direct revenue lines from Meta’s massive data center buildout and signal that the company could eventually compete alongside AWS, Azure, and Google Cloud rather than simply existing as their largest customer.
Slight tangent, but it matters: Meta previously struck compute deals with CoreWeave in April and Nebius in March. The Anthropic talks are not happening in isolation. There is a pattern here. Zuckerberg is not just spending, he is building an infrastructure business in plain sight, and the market is only beginning to price that in.
What to watch tonight beyond the headline beat:
- Any formal update or confirmation on the Anthropic compute deal
- Updated 2026 capex guidance and whether the range shifts higher again
- Q3 revenue guidance versus the $63.2 billion Wall Street is currently modeling
- Ad impression volume and price per ad for signals of AI-driven monetization gains
- Daily active user trends, particularly international, where growth has softened slightly
The bull case is not complicated. If Meta can bolt a cloud-rental business onto the most profitable advertising operation on Earth, it becomes two businesses in one stock at a valuation the market has not adjusted for yet.
The risk is that the capex guidance rises again, the Anthropic deal falls apart, and the market’s patience for a delayed payoff runs out a second time.
The commercial remaining performance obligation and the forward guide are what moves this stock tomorrow morning. Not the EPS beat everyone expects.
