Wall Street is eyeing a new burst of growth for Meta ahead of its Q1 earnings report

• Meta will report first-quarter earnings after the close on Wednesday.
• Analysts have set a high bar for revenue growth, which they think will be fueled by AI.
• Wall Street is seeking guidance on capex, as the company continues to build out AI capabilities.

Meta is among the companies that will kick off the mega-cap earnings Superbowl this week.

The Facebook parent will report first-quarter results on Wednesday after the close, and Wall Street is going in with high expectations for AI-fueled growth.

The company, which is one of the biggest spenders in the AI buildout race, has been in the spotlight in recent week. In early April, the firm released Muse Spark, its hotly anticipated AI model. Shortly after, it said it was planning to lay off 10% of staff to cut costs and make room for "investments," like the $115 billion it has earmarked for AI-focused capex this year.

The developments come at a volatile time in the AI trade, which has been rocked by concerns about high valuations and how artificial intelligence could disrupt the business model across industries this year. There are also broader concerns about the Iran war hanging in the background, which have caused tech stocks to whipsaw over the past month.

Analysts expect revenue of $55.51 billion for the quarter and earnings per share of $6.65.

Here's what Wall Street is looking for heading into Meta's call with investors

Bank of America: Optimism for Muse Spark

BofA analysts said they are optimistic about the performance and the potential returns from Muse Spark, particularly since the AI model was rolled out earlier than initially anticipated.

"Earlier reports indicated Meta had delayed the model launch to at least May, and we think an earlier release helps clear an uncertainty overhang for the stock. Meta has outlined a roadmap for materially improved LLM capabilities over the course of the year, suggesting scope for iterative performance gains," BofA said of upcoming models.

The bank pointed to how Google saw "a meaningful improvement in sentiment" after the tech firm made progress with its Gemini 3.0 model.

"Meta could be on a similar trajectory over the next 12 months if model performance continues to improve," BofA said. "We see the current valuation as attractive given a large AI opportunity, above industry ad growth, and strong financial position for AI."

Analysts reiterated their "buy" rating on Meta and issued a price target of $885, implying 32% upside from the stock's current levels.

Goldman Sachs: Strong growth, but keep an eye on capex

Goldman analysts also saw strong growth prospects for Meta, citing its checks on the company's advertising business. However, they noted that investors have "lower visibility" into the firm's outlook, given uncertainty around geopolitics and the economic environment.

The bank said it was eyeing updated guidance for Meta's accounting expenses and total capex for the year, particularly given the recently announced layoffs. It also expressed optimism for Muse Spark.

"We continue to believe that, over time, the efforts tied to the Meta Superintelligence Lab has the scope for re-inserting the company into the competitive framework for (at a minimum) consumer AI adoption and possibly an extension into uses cases," the bank wrote.

Goldman reiterated its "buy" rating on Meta and issued an $840 price target, implying 25% upside from current levels.

JPMorgan: AI ads to be a driving force

Analysts at JPMorgan said they expect "strong" growth from the Facebook parent this year, with revenue potentially rising 30% year over year in the first quarter, largely due to "continued core AI ads improvements."

Meta's heavy spending on AI doesn't show any signs of "easing," but the company looks like it's holding down "financial guardrails," the bank said, adding that the company holding its capex guidance for the year steady would likely be a bullish catalyst.

"Muse Spark starts push toward frontier of personal superintelligence, but need continued progress," analysts added of the AI outlook.

The bank reiterated its "overweight" rating on Meta and issued a $825 price target, implying 23% upside from current levels.

Truist: On track for strongest growth in five years

Truist said it expects Meta revenue to grow 31% year over year in the first quarter, the strongest growth the company has seen since 2021.

The increase will largely be fueled by strong user growth at the company, as well as an "improvement in monetization" as Meta integrates AI across its marketing and consumer engagement projects.

The company also looks like it could be catching up with the LLM competition after the latest launch of Muse Spark, the firm added.

"Despite near-term investor concerns over high levels of CapEx and Gemini's recent rise to the top of AI model rankings, META continues to be a key player and beneficiary of AI improvements, which to-date it has used to unlock better ranking and recommendation models to improve its ad targeting and efficiency, and drive spend on the platform," Truist analysts said.

"We find Meta shares compelling at current levels," they added.

Truist reiterated its "buy" rating on the stock and set a $900 price target, implying 34% upside.

Wedbush: Flywheel effect from AI

Wedbush said it was bracing for another strong earnings beat. In its view, investors are underestimating the "flywheel effect" of Meta's AI ad monetization, which should boost the company's profits, analysts said.

In a previous note, the firm added it was"encouraged" by Meta's cost-cutting efforts, referring to plans to trim headcount by 10%.

"In our view, this print will reinforce that Meta is one of the cleanest AI monetization stories in Big Tech where AI capex converts directly to measurable ad revenue uplift q/q," analysts added of the outlook going forward.

The firm reiterated its "outperform" rating and $900 price target, implying 34% upside from current levels.