Benchmark Reiterates Hold Rating on Meta Ahead of Earnings
Benchmark analyst Mark Zgutowicz reiterated a Hold rating on Meta (NASDAQ: META).
“We maintain our Hold rating in front META’s 1Q print on Wed., 4/19… Following last weeks announced 10% RIF (effective 5/20) and elimination of 6,000 open roles, we expect management to lower its CY26 total expense guidance range to ~$159B-$164B, from existing $162B-$169B.
Our ‘26E op. income has been revised up to $89.4B (from $83.8B), which sits +3% above consensus.
While management has suggested its end-to-end AI-powered ad solutions, notably Advantage+, are generating a $60B run-rate (30% of ad revenue), with the company facing a realistic est. $750B+ capex outlay over the next 5 years, management needs to provide a clearer articulation of the return flywheel.
We outline specific questions below and discuss why Muse Spark may be a step in the right direction fundamentally, it remains well short of competing frontier AI labs.”
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