1、 BofA Securities does and seeks to do business with issuers covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making the

2、ir investment decision.Refer to important disclosures on page 12 to 14.Analyst Certification on page 10.Price Objective Basis/Risk on page 10.12858902 Meta Platforms Inc Riding the AI wave Big revenue beat adds confidence in investment spend;Buy Reiterate Rating:BUY|PO:900.00 USD|Price:695.21 USD Ro

3、bust 2Q Rev/EPS beat and strong 3Q outlook 2Q rev at$47.5bn beat Street at$44.8bn.Ex-FX ad rev grew 22%,a 2pt accel.on 3pts easier ex-FX comp.GAAP OI/EPS at$25.7bn/$7.14 was above Street at$17.1bn/$5.89 with lower R&D,SBC and taxes.3Q rev outlook of$47.5$50.5bn(+17-24%y/y)was above Street at$46.3bn,

4、with high end suggesting 1pt ex-FX q/q acceleration.Key 2Q AI drivers were growing user engagement(content suggestions)and ad conversion rates.Investing more in AI,but a lot more to come Recent CEO posts suggested more AI investment spend was coming,but strong revenue growth vs peers should support

5、sentiment on AI returns.Meta will grow capex$30bn next year,and expenses likely over 25%(for AI personnel and depreciation)in a quest to build superintelligent AI(which can improve itself).2Q data indicates AI is already delivering strong ad results,and over time,AI advancements will unlock new reve

6、nue streams(content creation,AI assistants,AI devices).Sentiment risk is that unless revs.accelerate from here,margins and EPS growth rates are likely to be lower y/y in 2026.Raising revenues,expenses and 2026E EPS by 12%A strong 3Q outlook suggests AI investments are delivering results&we think str