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META's Bets on Privacy to Expand WhatsApp's Growth: What's Ahead?
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Key Takeaways
Meta Platforms is adding WhatsApp usernames so users can connect without sharing phone numbers.
The feature requires exact usernames, skips searchable directories and adds an optional username key.
META expects Q2 2026 revenues of $58B-$61B and raised 2026 capex guidance to $125B-$145B.
Meta Platforms (META - Free Report) is focusing on strengthening privacy across its platforms, including Facebook, WhatsApp and Instagram. The latest announcement of introducing WhatsApp usernames strengthens META’s long-term strategy of making its messaging ecosystem more privacy-centric while lowering one of the biggest barriers to user adoption, sharing personal phone numbers. The feature allows users to connect through unique usernames instead of revealing their mobile numbers, making WhatsApp more suitable for communicating with new contacts, community groups, creators and businesses.
Meta Platforms has also designed the feature with privacy at its core by eliminating searchable directories, requiring users to know an exact username before initiating contact and offering an optional username key for additional access control. Once enabled, first-time contacts will no longer see a user’s phone number, reinforcing WhatsApp’s position as a secure messaging platform.
The move complements the company’s broader push toward private digital communication. In recent times, Meta Platforms introduced Incognito Chat with Meta AI, which uses Private Processing technology to ensure that even Meta cannot access users’ AI conversations. Together, these features address growing consumer concerns around privacy and data security at a time when AI-powered messaging services are becoming more mainstream.
A strong privacy protection is expected to enhance WhatsApp’s competitive positioning against the likes of Signal and Telegram. The feature should support higher user engagement and retention across META’s Family of Apps, currently used by more than 3.5 billion people. As WhatsApp becomes more private and easier to use without exposing personal information, adoption among consumers, creators and businesses could accelerate, creating additional opportunities to expand business messaging, AI assistants, commerce and subscription-based monetization over time.
Meanwhile, META’s improved recommendation system is driving up user engagement. AI usage is making the company a popular name among users as well as advertisers. It expects to advance the capabilities of underlying media generation models and ship new features to further enhance the product experience in 2026. META expects total revenues between $58 billion and $61 billion for the second quarter of 2026. The company now expects 2026 capital spending between $125 billion and $145 billion (previous guidance was $115-$135 billion), citing higher component pricing and incremental data center costs to support future capacity.
META Faces Tough Competition in the Ad Space
Meta Platforms is facing stiff competition from the likes of Alphabet (GOOGL - Free Report) and Amazon (AMZN - Free Report) in the ad domain.
AI is driving Alphabet’s Search & Other revenues, which grew 19% year over year in the first quarter of 2026. Gemini Enterprise’s paid monthly active users grew 40% sequentially, while revenues from products built on Google’s generative AI models increased nearly 800% year over year. Alphabet’s total paid subscriptions reached 350 million, driven in part by Gemini app adoption and premium AI plans. The company has cited a more than 30% reduction in the cost of core AI responses since upgrading AI Overviews and AI Mode to Gemini 3, and a more than 35% reduction in search latency over the past five years. This mix of usage growth and efficiency supports continued investment while keeping Search economics intact.
Amazon’s advertising business continues rapid expansion as brands allocate more marketing budgets to its platform, leveraging its valuable consumer data and purchase intent signals. Advertising services revenues jumped 24% year over year to $17.2 billion in the first quarter of 2026, and advertising revenues grew to more than $70 billion in trailing-12-month revenues, reflecting successful AI-powered optimization of the platform and growing market share in digital advertising.
Meta Platforms shares have dropped 7.2% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 18.2%.
META Stock’s Price Performance
Image Source: Zacks Investment Research
Meta Platforms stock is trading at a premium, with a forward 12-month price/sales of 5.57X compared with the Zacks Internet Software industry’s 3.66X. META has a Value Score of D.
META’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $33.01 per share, up by a penny over the past 30 days, suggesting 40.53% year-over-year growth.
View the Zacks #1 Rank List
Image: Bigstock
META's Bets on Privacy to Expand WhatsApp's Growth: What's Ahead?
Key Takeaways
Meta Platforms (META - Free Report) is focusing on strengthening privacy across its platforms, including Facebook, WhatsApp and Instagram. The latest announcement of introducing WhatsApp usernames strengthens META’s long-term strategy of making its messaging ecosystem more privacy-centric while lowering one of the biggest barriers to user adoption, sharing personal phone numbers. The feature allows users to connect through unique usernames instead of revealing their mobile numbers, making WhatsApp more suitable for communicating with new contacts, community groups, creators and businesses.
Meta Platforms has also designed the feature with privacy at its core by eliminating searchable directories, requiring users to know an exact username before initiating contact and offering an optional username key for additional access control. Once enabled, first-time contacts will no longer see a user’s phone number, reinforcing WhatsApp’s position as a secure messaging platform.
The move complements the company’s broader push toward private digital communication. In recent times, Meta Platforms introduced Incognito Chat with Meta AI, which uses Private Processing technology to ensure that even Meta cannot access users’ AI conversations. Together, these features address growing consumer concerns around privacy and data security at a time when AI-powered messaging services are becoming more mainstream.
A strong privacy protection is expected to enhance WhatsApp’s competitive positioning against the likes of Signal and Telegram. The feature should support higher user engagement and retention across META’s Family of Apps, currently used by more than 3.5 billion people. As WhatsApp becomes more private and easier to use without exposing personal information, adoption among consumers, creators and businesses could accelerate, creating additional opportunities to expand business messaging, AI assistants, commerce and subscription-based monetization over time.
Meanwhile, META’s improved recommendation system is driving up user engagement. AI usage is making the company a popular name among users as well as advertisers. It expects to advance the capabilities of underlying media generation models and ship new features to further enhance the product experience in 2026. META expects total revenues between $58 billion and $61 billion for the second quarter of 2026. The company now expects 2026 capital spending between $125 billion and $145 billion (previous guidance was $115-$135 billion), citing higher component pricing and incremental data center costs to support future capacity.
META Faces Tough Competition in the Ad Space
Meta Platforms is facing stiff competition from the likes of Alphabet (GOOGL - Free Report) and Amazon (AMZN - Free Report) in the ad domain.
AI is driving Alphabet’s Search & Other revenues, which grew 19% year over year in the first quarter of 2026. Gemini Enterprise’s paid monthly active users grew 40% sequentially, while revenues from products built on Google’s generative AI models increased nearly 800% year over year. Alphabet’s total paid subscriptions reached 350 million, driven in part by Gemini app adoption and premium AI plans. The company has cited a more than 30% reduction in the cost of core AI responses since upgrading AI Overviews and AI Mode to Gemini 3, and a more than 35% reduction in search latency over the past five years. This mix of usage growth and efficiency supports continued investment while keeping Search economics intact.
Amazon’s advertising business continues rapid expansion as brands allocate more marketing budgets to its platform, leveraging its valuable consumer data and purchase intent signals. Advertising services revenues jumped 24% year over year to $17.2 billion in the first quarter of 2026, and advertising revenues grew to more than $70 billion in trailing-12-month revenues, reflecting successful AI-powered optimization of the platform and growing market share in digital advertising.
META’s Share Price Performance, Valuation & Estimates
Meta Platforms shares have dropped 7.2% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 18.2%.
META Stock’s Price Performance
Image Source: Zacks Investment Research
Meta Platforms stock is trading at a premium, with a forward 12-month price/sales of 5.57X compared with the Zacks Internet Software industry’s 3.66X. META has a Value Score of D.
META’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings is pegged at $33.01 per share, up by a penny over the past 30 days, suggesting 40.53% year-over-year growth.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Meta Platforms currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.