Meta's ads grew 28% in the June quarter while heavy AI building cut cash left over. At $721 a share the growth outlook looks fair, so I start with a hold and a $745 target.
Key points
- $60.8 billion in sales for the June quarter of 2026, up 28% from last year, with ad volume and ad prices both higher.
- $30.1 billion in building spend for the June quarter of 2026 cut cash left after bills to $1.8 billion for the quarter.
- $61 billion to $64 billion in sales guide for the September quarter of 2026 points to continued ad strength into the fall.
The call
The market looks about right here. At $721 a share today, the price needs mid teens sales growth in 2027. That growth must come with steady profit near 36% of sales in 2027.
Quarterly revenue stays strong while capex is tested ($ billions)- Reported revenue
- Mine, forecast
SEC XBRL company facts to Q2 2026; Q3-Q4 2026 author's estimates. As of Oct 8, 2026.
I expect steady growth but no quick payoff. My sales work for 2027 is about $287 billion for 2027. Profit then pays for AI building, so upside looks small.
Valuation
| Walk to target | Figure |
|---|
| 2026 sales estimate | $249.6 billion |
| 2027 sales estimate, up 15% | $287.1 billion |
| 2027 profit per share estimate | $32.39 |
| Fair multiple, or price per $1 of profit | 23 times |
| 12 month target | $745 a share |
| A 23 times profit multiple fits a fast grower with heavy building needs. Upside of 3% against downside near 10% on slower growth supports a hold. | |
What the target needs is sales growth in 2027 ($ a share)Author's arithmetic from $249.6B 2026 sales base; 36% margin and 23 times profit. Oct 8, 2026.
Risks
- Ad demand weakens if shoppers pull back, which you would see in lower ad prices and flat user time.
- Building costs run past sales, which you would see in rising leases and falling free cash.
- Privacy rulings limit ad targeting, which you would see in fines and weaker measured ad returns.
What would change my mind
Faster paid use of AI agents and business tools with clear sales in 2027 would make me more positive.