A month has gone by since the last earnings report for Meta Platforms (META Quick QuoteMETA - Free Report) . Shares have added about 3.8% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Meta Platforms due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Meta Platforms, Inc. before we dive into how investors and analysts have reacted as of late.

META's Q1 Earnings Beat Estimates on Ad Growth and AI Momentum

Meta Platforms delivered first-quarter 2026 earnings of $7.31 per share, which rose 13.7% year over year and beat the Zacks Consensus Estimate by 8.94%. Revenues surged 33.1% year over year to $56.31 billion, topping the consensus mark by 1.47%. At constant currency (cc), revenues soared 29% year over year.

The reported quarter reflected sturdy demand across Meta’s ad ecosystem and healthy usage trends, with Family daily active people (DAP) averaging 3.56 billion in March 2026. Management also highlighted progress in artificial intelligence (AI), including the release of its first model from Meta Superintelligence Labs.

META’s Ad Business Remains the Core Growth Engine

Family of Apps continued to do the heavy lifting. Revenues from Family of Apps (99.3% of total revenues), which includes Facebook, Instagram, Messenger, WhatsApp and other services, increased 33.4% year over year to $55.91 billion. Advertising revenues were $55.02 billion in the first quarter, up 33%, while Family of Apps' other revenues jumped 73.5% year over year to $885 million.

The advertising results were supported by improving monetization fundamentals. Ad impressions delivered across the Family of Apps increased 19% year over year. Average price per ad rose 12%, indicating that Meta Platforms is capturing both higher volume and better pricing across its surfaces.

META’s Engagement Gains Support the Monetization Stack

Meta Platforms pointed to ongoing traction from recommendation and ranking work across its apps. On Instagram, the company said ranking improvements in the reported quarter drove a 10% lift in reel time spent, underscoring the importance of short-form video engagement as a usage driver.

Facebook also showed notable momentum in video consumption. Meta Platforms said total video time on Facebook increased more than 8% globally in the quarter, marking the largest quarter-over-quarter gain in four years. Management stated these improvements were the product of deeper data signals and faster indexing of new posts, which helps the platform recommend content more quickly after it is published.

META’s Investment Profile Shows Up in Expense Mix

Meta Platforms’ first-quarter costs and expenses jumped 35.1% year over year to $33.44 billion. The company attributed the year-over-year rise primarily to infrastructure costs and employee compensation, with infrastructure pressure tied to higher depreciation, data center operating costs and third-party cloud spend.

Even with that step-up in spending, Meta Platforms remained highly profitable at the operating line. Income from operations jumped 30.3% year over year to $22.87 billion, while operating margin contracted 90 basis points to 40.6%, reflecting the company’s ability to scale revenues alongside elevated investment levels.

META’s Cash Flow Supports Large Infrastructure Plans

Meta Platforms’ capital intensity remained elevated as it builds compute capacity for AI and product initiatives. Capital expenditures, including principal payments on finance leases, totaled $19.84 billion in the first quarter. 

Still, cash generation stayed solid. Cash flow from operating activities was $32.23 billion and free cash flow was $12.39 billion in the quarter. 

As of March 31, 2026, cash & cash equivalents and marketable securities were $81.18 billion compared with $81.59 billion as of Dec. 31, 2025. Long-term debt was $58.75 billion as of March 31, 2026.

META’s Outlook Reflects AI Spending and Growth Visibility

For second-quarter 2026, Meta Platforms expects total revenues between $58 billion and $61 billion. The company said its outlook assumes foreign currency will be about a 2% tailwind to year-over-year total revenue growth based on current exchange rates.

Meta Platforms kept its 2026 expense outlook unchanged at $162 billion to $169 billion, but raised its capital expenditure forecast. The company now expects 2026 capital expenditures, including principal payments on finance leases, in the range of $125 billion to $145 billion (previous guidance was $115-$135 billion), citing higher component pricing and incremental data center costs to support future capacity.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

Currently, Meta Platforms has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Meta Platforms has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Meta Platforms belongs to the Zacks Internet - Software industry. Another stock from the same industry, Spotify (SPOT Quick QuoteSPOT - Free Report) , has gained 15.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

Spotify reported revenues of $5.3 billion in the last reported quarter, representing a year-over-year change of +20.3%. EPS of $4.04 for the same period compares with $1.13 a year ago.

Spotify is expected to post earnings of $3.31 per share for the current quarter, representing a year-over-year change of +789.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.

Spotify has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.