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The company also offered weak Q3 guidance, expecting potential tailwinds from less personalized advertising in Europe.
Published July 30, 2026
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Meta grew advertising revenue 27% year over year to $59.4 billion in Q2 and emphasized that its bets on artificial intelligence continue to improve campaign performance. Total revenue was up 28% YoY to $60.8 billion for the three-month period ended June 30, according to an earnings statement. While revenue landed above expectations, earnings came in under Wall Street’s targets and shares slid following the report.
The Facebook and Instagram owner continues to face skepticism about its massive AI spending spree and offered a Q3 forecast that disappointed investors, forecasting revenue to land in the range of $61 billion to $64 billion. CFO Susan Li said that the company is lapping a period of strong ad impressions growth in Q3 and could experience additional headwinds from policy changes in Europe that allow for less personalized ads.
Executives sought to allay investor concerns by underscoring Meta’s juggernaut status in digital advertising and how AI is enhancing monetization efficiency.
“On a dollar basis, our ads business is reporting faster year-over-year revenue growth than any other company's reported ad business — so these AI investments are paying off,” Meta CEO Mark Zuckerberg said on a call discussing the earnings with analysts.
Advantage+, Meta’s AI-powered suite of ad products, continues to gain steam and reached a $75 billion annual revenue run rate in Q2. The quarter also saw the rollout of the Meta Generative Recommender, which Li described as a “paradigm shift” in how the platform runs ads.
“Rather than scoring every possible ad individually, we are now using [large-language models] to reason about ad content and user preferences together, and predict the best ad for each person,” Li explained. “This makes our ad matching more intelligent and more precise, which compounds performance gains for advertisers.”
Some researchers expect the social media giant could surpass Google in ads revenue for the first time this year. That said, Google has a wider range of business drivers, including a cloud-computing segment that is booming amid the AI bonanza.
Meta made some strides in diversifying beyond ads in Q2. “Other” revenue for the family of apps was up 73% YoY to hit $1 billion for the first time thanks to stronger demand for WhatsApp paid messaging and subscriptions. But $1 billion can also feel like a drop in the bucket for a business as scaled as Meta, and investors are paying greater attention to capital expenditures these days.
On that front, Meta narrowed its full-year CapEx to the range of $130 billion to $145 billion compared to a prior estimate of $125 billion to $145 billion, meaning the bottom of the range is now higher than previously anticipated.
“Meta believes AI infrastructure is now a strategic asset, but its bill is arriving faster than the payoff. Meta's ad business is still a monster, but everything else got more expensive,” Forrester Vice President and Research Director Mike Proulx said in emailed comments. “Revenue beat expectations and engagement continued to grow, but what it generated in cash this quarter almost all got eaten by AI infrastructure spending. Investors now have to decide whether Meta's growing list of AI initiatives represents company diversification or distraction.”
