Meta Platforms Inc. (META) Q2'26 Review Core Business Provides Evidence of Near Term ROIC but Lack of Visibility into Long ...

Equity Research 30 July 2026 | 12:04AM EDT

Meta Platforms Inc. (META) Q2’26 Review: Core Business Provides Evidence of Near-Term ROIC but Lack of Visibility into Long-Term Compute Spend Persists

META 12m Price Target: $725.00 Price: $585.61 Upside: 23.8% BUY Eric Sheridan With its Q2’26 earnings report, META mgmt framed a few key | Goldman Sachs & Co. LLC narratives: 1) the AI driven compute investments that the company Alex Vegliante, CFA is making continue to demonstrate healthy returns (in terms of YTD | Goldman Sachs & Co. LLC revenue growth & solid Q3 revenue guidance) in the form of engagement, recommendations, ad performance and monetization Aarshiya Sachdeva | Goldman Sachs & Co. LLC across the core Family of Apps properties; 2) AI agents are likely a

For the exclusive use of more visible extension outside the core that could be a pathway to scaling AI efforts, with management framing various opportunities Key Data _____________________________________ Market cap: $1.5tr (personalized consumer AI agents, AI tools for its existing advertiser, Enterprise value: $1.5tr 3m ADTV: $11.1bn creator & SMB partners, etc.) that provide a runway toward future United States revenue opportunities across subscriptions, usage-based pricing & Americas Internet M&A Rank: 3 outcome-based business models; 3) a wide range of opportunities GS Forecast __________________________________ being framed with respect to broader enterprise AI opportunities 12/25 12/26E 12/27E 12/28E

across foundational models (APIs), tools to build/scale operations Revenue ($ mn) New Revenue ($ mn) Old 200,965.0 255,408.6 200,965.0 255,175.6 310,507.3 306,410.5 370,836.7 357,336.1 (“business in a box”) and direct monetization of compute (e.g. cloud EBITDA ($ mn) 101,892.0 123,753.0 156,691.6 215,616.3 EBIT ($ mn) 83,276.0 86,938.3 89,950.2 118,608.1 licensing deals), albeit with investor questions likely to remain EPS ($) New around the scale of investments to build those operations and path EPS ($) Old P/E (X) to monetization; 4) infrastructure investments remain elevated and Dividend yield (%) 0.3 0.4 0.4 0.4 targeted over the medium-term, but with lack of visibility or framing Net debt/EBITDA (X) 0.2 0.1 0.4 0.3

fce07ef8421611dd87ec0014c24035ec into longer-term capital plans – as a result of management’s 6/26 9/26E 12/26E 3/27E qualitative framing of the market opportunities and the sustained EPS ($)

capacity supply/demand imbalances, we raise our cumulative GS Factor Profile ______________________________ Growth 2027-28 capex estimates by ~14%. Financial Returns In our opinion, META’s messaging was that while core advertising Multiple remains a healthy & early avenue to provide signal of return against levels of spend in AI broadly, management also remains excited Integrated

(albeit without specifics) on additional future monetization Percentile 20th 40th 60th 80th 100th opportunities from AI (with levels of spend across opex/capex needed to support those long-term revenue and operating income META relative to Americas Coverage META relative to Americas Internet drivers). Most notably, management emphasized placing a greater value on building/scaling compute near-term rather than over the Source: Company data, Goldman Sachs Research estimates. See disclosures for details. long-term, which we interpret as more upward pressure on absolute $ opex/capex growth in ‘26/’27 before growth moderates in the

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Goldman Sachs Meta Platforms Inc. (META)

Meta Platforms Inc. (META) Balance Sheet ($ mn) _______________________________________ BUY Rating since Sep 12, 2021 12/25 12/26E 12/27E 12/28E Cash & cash equivalents 35,873.0 72,383.2 24,551.2 9,150.6…