Piper Sandler Reaffirms Meta as Top Large-Cap Internet Pick on Digital Ad Recovery and AI Strength
Piper Sandler analysts have reiterated Meta Platforms (NASDAQ: META) as their leading large-cap internet stock, citing improving digital advertising trends and growing investor confidence ahead of the company’s Q2 earnings.
“We continue to favor META among large caps due to strong industry checks and its strategic investments in AI,” the analysts wrote, as they raised their forecasts for the company.
Digital ad spending rose 6.6% year-over-year in the second quarter—an acceleration from Q1 and 130 basis points above Piper’s initial expectations.
Piper noted that Meta returned to a “beat and raise” pattern in Q2, after a particularly weak performance in Q1 2025—the worst quarter for ad buyers since Q4 2022.
June was highlighted as the strongest month of the quarter, with performance marketers benefiting from softness among brand advertisers and Chinese resellers.
Optimism was further fueled by feedback from the Cannes Lions advertising festival. Piper pointed to Meta’s new ad placements within WhatsApp, with at least one ad buyer calling them “interest-based and effective,” despite early doubts.
The analysts also emphasized Meta’s strong performance amid broader market headwinds. The company’s lower cost-per-thousand impressions (CPMs) helped attract advertisers who had previously been priced out, reinforcing its market resilience.
Piper’s bullish view continues to be driven by Meta’s AI initiatives. The firm cited the strength of Reels, expansion into new verticals like travel and consumer packaged goods (CPG), and CEO Mark Zuckerberg’s focused hiring and AI strategy as key positives.
“We’re eager to hear more from CEO Zuckerberg about AI hiring plans and long-term strategy,” the analysts wrote, adding that investors appear prepared for increased capital spending.
Piper also raised its longer-term projections, forecasting Meta’s third-quarter revenue could reach $47 billion—representing 16% annual growth.
“Meta continues to deliver best-in-class execution in the internet sector,” the analysts concluded, reaffirming their Overweight (OW) rating.
