Meta Stock Surges as AI Optimism Clashes with Advertiser Discontent Ahead of Q2 Earnings

Meta shares rally 13.7% in 30 days as advertisers criticize AI tools, but institutional investors like Resona increase stakes, betting on AI monetization.

Meta Platforms’ shares have staged a remarkable turnaround over the past month, clawing back from the doldrums to become one of the S&P 500’s top performers. The stock recently changed hands at €581.90, up 0.47% from the previous close of €579.20, and has gained roughly 10% over the past week — estimates range from 9.93% to 10.25%, depending on the exact measurement window. The 30-day advance stands at a punchy 13.7%. Yet the rally masks growing friction with the very advertisers who fuel Meta’s core business.

Several marketing managers from major brands have publicly criticised the company’s “Advantage+” suite of generative AI tools, describing the output as chaotic and error?prone. In one eyebrow?raising example, outdoor retailer REI found an AI?generated Instagram campaign featuring a bicycle with two handlebars. Advertisers accuse Meta of automatically enrolling them into experimental AI features without adequate control, risking brand?damaging misrepresentations. Meta, for its part, points to its terms of service, which state that the AI can make mistakes and that final review rests with the advertiser.

Institutional investors, however, appear unfazed by the operational headaches. Regulatory filings from 15 July 2026 show that Resona Asset Management increased its Meta stake by 2.0%, purchasing 13,019 additional shares to bring its total holdings to 678,480. The position is worth approximately $383.7 million and now ranks among Resona’s eight largest investments, making up about 1.9% of its portfolio. The move signals that long?term institutions remain bullish on the platform’s prospects despite short?term creative hiccups.

Analysts attribute the stock’s resurgence to a shifting perception of Meta’s artificial intelligence strategy. JPMorgan’s Doug Anmuth points to the start of external AI monetisation and early signs of a new product cycle as key catalysts. Reports that Meta may sell or lease excess computing capacity through cloud or enterprise services have further buoyed sentiment, alleviating fears about the company’s eye?watering capital expenditure plans. Meta has guided for full?year capex between $125 billion and $145 billion, underpinned by a $107 billion surge in contractual commitments.

The advertising business — Meta’s cash engine — is already showing concrete returns from AI investment. The company’s tool set that helps advertisers identify their most valuable customers now generates an annualised revenue run?rate of over $20 billion, more than double the figure from a year ago. In the first quarter, AI?driven improvements boosted conversion rates on certain ads by more than 6%. This profitable core provides the strongest argument for Meta’s ambitious spending, even as some analysts caution that rising investment must translate into rising revenue — a “show?me” narrative the company has yet to fully close.

Technically, the stock has regained significant ground. It now trades 11.67% above its 50?day moving average of €521.09 and 6.31% above the 200?day average of €547.35. From the 52?week low of €452.10 set in late March, the shares have recovered 28.71%. The relative strength index sits at 65.8, with the 14?day RSI at 65.4 — strong momentum but still shy of the overbought threshold near 70. The 52?week high of €677.80 from July 2025 remains 14.15% away.

All eyes are now on Meta’s second?quarter earnings, scheduled for release after the bell on Wednesday, 29 July 2026, followed by a conference call at 16:30 Eastern Time. Investors will scrutinise updates to the capex forecast, progress on external AI monetisation, and — critically — whether advertiser discontent has begun to dent spending. With the stock’s 30?day annualised volatility at 49.40%, sharp swings in either direction remain a live possibility during earnings season.