Analysts revamp Meta stock outlook before Connect conference | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Since Facebook changed its name to Meta, it has been trying to reposition itself as more than just a social media company. The Metaverse play turned out to be a big flop, and the company pivoted to artificial intelligence. Meta hopes to become the first to achieve “superintelligence,” thereby winning the AI race.

The company showed that it is absolutely committed to achieving this goal by heavily investing in the AI infrastructure and poaching many AI experts from other companies in the past few months. I’ve covered those activities here.

Meta has sold more than 2 million units of second generation Ray-Ban smart glasses since launch.

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Meta Q2 revenue grows 22% to $47.52 billion year-over-year

On July 30, Meta (META) reported its results for Q2 of fiscal 2025.

During the earnings call, Mark Zuckerberg, founder, chairman, and CEO, said that AI has improved Meta’s ability to show people more engaging content and that the recommendation system has become so much better that it led to a 5% increase in time spent on Facebook and 6% on Instagram in Q2.

Here are the earnings highlights:

Revenue was $47.52 billion, an increase of 22% year-over-year.
Total costs and expenses were $27.07 billion, an increase of 12% YoY.
Capital expenditures, including principal payments on finance leases, were $17.01 billion.
Cash, cash equivalents, and marketable securities were $47.07 billion as of June 30, 2025.
Cash flow from operating activities was $25.56 billion.
Free cash flow was $8.55 billion.

Meta provided an outlook for fiscal year 2025:

Total expenses to be in the range of $114 to $118 billion.
Capital expenditures, including principal payments on finance leases, in the range of $66 to $72 billion.

“Over the last few months, we’ve begun to see glimpses of our AI systems improving themselves, and the improvement is slow for now but undeniable,” Zuckerberg said. “And developing superintelligence, which we define as AI that surpasses human intelligence in every way, we think is now in sight.”

Meta Connect developer conference

Meta’s annual Connect developer conference starts on September 17. According to CNBC, the company will use it to announce a stronger campaign for smart glasses and launch its first consumer-ready glasses with a display.

The glasses, internally called Hypernova, are expected to be priced around $800. Meta is anticipated to launch its first wristband, which lets users operate the glasses with hand gestures.

More AI Stocks:

According to Wired, Meta has sold more than 2 million units since launching the second generation of Ray-Ban smart glasses in October 2023, built in collaboration with EssilorLuxottica.

Bank of America analysts set expectations for Connect developer conference

Bank of America analysts Justin Post and Nitin Bansa provided their opinions on what to expect from the Connect conference and how it could reinforce confidence in AI strategy.

Analysts think Meta should use the conference to remind investors about its noticeable progress on AI product integration, and to show a comprehensible roadmap for how AI investments will transform into sustainable long-term growth.

Six key areas of investor focus for the event could be:

Smart glasses’ mass adoption potential
Ecosystem strength
New killer apps
Engagement data
AI progress
Potential cost inflections or savings in Metaverse spend.

Analysts noted downside risk factors for Meta:

decline in user activity from competition;
privacy issues impacting revenue generation;
potential for Wall Street to assign a negative value to Metaverse.

Post reiterated a buy rating and a target price of $900, based on a 27 multiple of his estimate for GAAP earnings per share for 2026, plus net cash. “On a total company basis, including Metaverse investments, our valuation is at a slight premium to S&P 500 given Meta’s higher growth rate and AI opportunity,” he said. “Historically, Meta has traded at an average premium of 3pts to S&P 500.”