Meta Dips Below $600 Ahead of Q2 Earnings — Can a 25% Correction Be Reversed?

As of the close on Friday, July 24, 2026, Meta Platforms (META) ended at $595.19, down 1.80% from the prior close of $606.10, with an intraday low of $594.45 and a high of $609.98. Markets are currently closed for a U.S. holiday, so the stock is static at that level. Since hitting a 52-week high of $796.25 in April, the stock has pulled back roughly 25%. All eyes are now on the Q2 earnings report due after the bell on Wednesday, July 29, which is widely seen as the key near-term catalyst.^{[The Motley Fool]}

Ad Business Still Strong, Revenue Growth Over 20%

Meta’s Q2 revenue guidance of $58 billion to $61 billion compares to $47.52 billion in the year-ago period, implying YoY growth of roughly 22% to 28%.^{[The Motley Fool]}While that’s a deceleration from Q1’s 33% growth, The Motley Fool notes the slowdown was already baked into guidance, making it less risky than an unexpected miss.

Q1 ad metrics were robust: ad impressions rose 19% YoY, average ad prices increased 12%, and daily active people across the family of apps averaged 3.56 billion, up 4% YoY.^{[The Motley Fool]}24/7 Wall Street notes that Q1 revenue grew 33.08% YoY to $56.31 billion, with gross margins of 82%, operating margins of 41.44%, and a return on invested capital (ROIC) of 20.69%.^{[24/7 Wall Street]}

FX Leaders reported on July 22 that Meta’s stock had briefly rallied to around $686 on optimism about monetizing excess AI compute capacity, but the gains quickly faded, with the stock slipping below $630 on Wednesday, July 22.^{[FX Leaders]}The report says investors are reassessing the company’s increasingly expensive AI strategy.

AI Capex Keeps Climbing, Market Focuses on Return Prospects

The pressure on Meta’s stock isn’t coming from its ad business, but from its expanding capex plans. According to The Motley Fool, Meta raised its full-year 2026 capex guidance in April to $125 billion–$145 billion, up from the prior range of $115 billion–$135 billion. In Q1 alone, the company spent $19.84 billion.^{[The Motley Fool]}

Despite the heavy spending, Meta’s financial position remains solid. Q1 free cash flow was $12.39 billion, and the company ended the quarter with $81.18 billion in cash and marketable securities. The full-year 2026 total expense guidance of $162 billion–$169 billion was left unchanged, which The Motley Fool says suggests the capex increase is showing up more on the balance sheet than the income statement for now.^{[The Motley Fool]}

FX Leaders, citing Wedbush analyst Ygal Arounian, notes that Amazon currently offers a more attractive hyperscale cloud investment opportunity than Meta. While Meta’s ad business remains strong, the market is skeptical about whether its AI investments outside of advertising will generate meaningful returns.^{[FX Leaders]}

Valuation Below the Market, Wall Street Still Bullish

After the recent pullback, Meta’s valuation has dipped below the broader market. According to The Motley Fool, Meta trades at roughly 22x earnings, compared to the S&P 500’s roughly 28.5x.^{[The Motley Fool]}24/7 Wall Street puts Meta’s forward P/E at roughly 18x.^{[24/7 Wall Street]}

Wall Street analysts remain overwhelmingly bullish. According to 24/7 Wall Street, Meta has 57 buy ratings, 6 hold ratings, and zero sell ratings. The consensus price target is $826.01, implying roughly 38.8% upside from the current close of $595.19.^{[24/7 Wall Street]}The outlet also notes Meta has beaten EPS estimates for six consecutive quarters.

The Motley Fool sums it up: a company growing revenue at over 20% and trading at roughly 22x earnings isn’t priced for optimism — it’s pricing in fears that AI infrastructure investments won’t pay off on a timeline investors find acceptable. But the ad data so far, the outlet argues, suggests the 25% pullback may be overdone.^{[The Motley Fool]}

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