# Meta's ad revenue jumps 27% as AI spending cuts free cash flow

Digest AI · Business & Funding · published 2026-10-20T16:44:00Z

Canonical: https://digestai.news/story/meta-s-ad-revenue-jumps-27-as-ai-spending-cuts-free-cash-flow

## Summary

Meta Platforms reported ad revenue of $59.36 billion, up 27% year‑over‑year, driven by 14% more ad impressions and a 12% increase in price per ad. The company’s AI‑driven Advantage Plus product now exceeds a $75 billion annual revenue run rate.

That lift pushed second‑quarter free cash flow down to $784 million from $8.55 billion a year earlier, while operating margin fell to 31% from 43% and long‑term debt rose to $83.66 billion. Diluted EPS of $6.18 missed the $7.22 consensus, ending a six‑quarter streak of beats.

Analysts set an average price target of $819, implying about 18% upside, but the stock trades at $694.25, below the $730 range where it has historically stalled.

## Key points

- Ad revenue rose 27% to $59.36 billion, with 14% more impressions and 12% higher ad prices.
- Analysts target $819, about 18% upside, while the stock sits at $694.25 below the $730 breakout level.

## Why it matters

Meta's AI‑heavy spending threatens profitability, influencing investor sentiment and signaling how large tech firms balance AI investment against cash flow.

## Sources

1. [What It Will Take to Get Meta Above This New Plateau](https://247wallst.com/investing/2026/10/21/what-it-will-take-to-get-meta-above-this-new-plateau) (247wallst.com, 2026-10-20)

Part of the developing story: [Wall Street Debates Alphabet AI Dominance](https://digestai.news/thread/alphabet-appears-to-be-the-easiest-ai-trade-of-the-year-before-its-q3-print) (5 stories)

## Cite

Digest AI, "Meta's ad revenue jumps 27% as AI spending cuts free cash flow", 20 October 2026, https://digestai.news/story/meta-s-ad-revenue-jumps-27-as-ai-spending-cuts-free-cash-flow

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