Meta Platforms (Meta (META)) stock fell nearly 10% in Thursday's premarket session as investors weighed a second-quarter earnings miss and sharply higher AI spending plans. The company reported revenue of $60.8 billion, topping the analyst consensus estimate of $59.5 billion, but adjusted earnings of $6.18 per share missed expectations of $7.13. Meta also raised the low end of its 2026 capital expenditure outlook to a range of $130 billion to $145 billion.
Despite the selloff, Jefferies analyst Brent Thill and CNBC's Jim Cramer said Meta still has long-term upside. Both argued, however, that investors want clearer evidence that the company's massive AI investments will generate meaningful revenue.
AI Spending Needs Stronger Revenue Story
Thill told CNBC on Thursday that investors are looking for more clarity on the businesses that will fund Meta's growing AI investments. He said the company has yet to clearly outline whether future growth will come from cloud computing, messaging, AI services or other initiatives. He added that the debate reflects a broader concern across the technology sector: when generative AI investments will begin producing meaningful returns and how long companies can sustain elevated spending.
Jefferies Still Sees More Upside
Thill reiterated his Buy rating and $825 price forecast on Meta. He said the company still has significant earnings growth potential and does not require a premium valuation to justify further upside. He also described Meta as one of the least-loved large-cap internet stocks, saying it still has "more gas in the tank" and enough room to launch new products and services that can drive higher returns over the next year.
Cramer Calls For Greater Spending Discipline
Cramer said Meta's second-quarter results tested his confidence in management after the company missed bottom-line expectations and issued softer-than-expected guidance. While he criticized Meta's continued heavy AI spending and called for stricter cost discipline, he said he would continue holding the stock. Cramer also urged the company to better monetize WhatsApp and take a more aggressive approach to litigation, adding that investor sentiment could improve now that uncertainty around the Federal Reserve has eased.
Meta Platforms Price Action
META Price Action: Meta Platforms shares were down 9.63% at $529.19 during premarket trading on Thursday. The stock is near its 52-week low of $520.26.
