Shares of Meta Platforms Inc. (META) are in focus on Thursday after the company missed Wall Street expectations with its second quarter results, with the stock now on track for the 11th consecutive day of decline.

During an interview with CNBC, Patrick Moorhead, chief analyst at Moor Insights & Strategy, said that Meta’s Q2 earnings miss was down to the company’s own decisions rather than external market conditions.

were down more than 9% in Thursday’s pre-market trade. META was the top trending ticker on Stocktwits at the time of writing.

Moorhead Explains What Hurt META’s Earnings In Q2

Moorhead argued that Meta's disappointing quarter was “mostly self-inflicted,” saying the company delivered a revenue beat but fell short on earnings because expenses came in higher than expected.

According to Moorhead, the earnings miss was “primarily driven by running hot on expenses,” with investors also reacting negatively to what he described as “a very weak guide.” Rather than pointing to broader macroeconomic headwinds or weakness in digital advertising, he suggested the shortfall stemmed largely from Meta’s own spending decisions.

Looking ahead, Moorhead said investors are increasingly focused on Meta's long-term AI monetization strategy. He characterized the company's challenge as figuring out “how do I get into the cloud business?”

Market analyst Steven Grasso echoed Moorhead’s view, saying that Meta's aggressive investments are weighing on profitability. Grasso noted that roughly 98% of Meta's revenue still comes from advertising, while its Reality Labs division continues to burn between $4 billion and $5 billion every quarter.

He added that, as an advertising business, Meta does not need to be investing so aggressively in data centers and said a pullback in capital expenditures could improve investor sentiment toward the stock.

Wall Street Trims META Stock Price Targets

Several Wall Street firms lowered their price targets on Meta following the earnings report, though they largely maintained bullish ratings on the stock.

Wells Fargo cut its price target to $640 from $835 while reiterating an ‘Overweight’ rating. The firm said uncertainty surrounding hyperscaler AI spending has made Meta's return on investment from its AI infrastructure buildout harder to assess.

Wells Fargo also pointed to management's comments indicating a desire for greater flexibility in capacity expansion beyond 2027 and less interest in near-term capacity sales, prompting the firm to lower its earnings estimates.

Citizens trimmed its price target to $770 from $800 while maintaining an ‘Outperform’ rating. The firm said Meta posted a modest revenue beat but weaker profitability and guidance, adding that continued investment in AI infrastructure expands the company's long-term monetization opportunities despite weighing on near-term capital spending.

Barclays lowered its price target to $780 from $830 while keeping an ‘Overweight’ rating. Analyst Ross Sandler said Meta delivered another solid quarter and outlined plans for several new AI products and services, each of which could eventually develop into meaningful revenue-generating businesses.

META’s Q2 At A Glance

Meta reported earnings per share (EPS) of $6.18 on revenue of $60.8 billion during Q2, while Wall Street expected an EPS of $7.4 on revenue of $60.3 billion, according to Fiscal.ai data.

The company forecast third-quarter (Q3) revenue in the range of $61 billion to $64 billion. At a midpoint of $62.5 billion, it fell short of Wall Street’s expectations of $63.23 billion.

CEO Mark Zuckerberg struck an optimistic tone despite the earnings miss, saying AI is already driving improvements across Meta’s core advertising business while creating “entirely new enterprise opportunities.”

He added that the benefits of the company’s AI investments are “already showing” and expressed confidence in their long-term potential.

What Retail Traders Think Of META Stock

Retail sentiment on Stocktwits around Meta trended in the ‘bearish’ territory at the time of writing.

is down 11% year-to-date and 16% over the past 12 months. The S&P 500 ETF (SPY) is up 15% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 17%.

The Vanguard Morningstar Growth ETF (VUG) is up 9% during this period, while the Vanguard Morningstar Total Stock Market ETF (VTI) is up 15%.