Meta Platforms is preparing for a pivotal moment this Wednesday, as it gears up to report its third-quarter earnings after the market closes. The social media giant has increased its capital expenditure forecasts twice this year, enhancing investor anticipation for substantial returns through ambitious AI-related projects.
Wall Street analysts are optimistic, forecasting a record-high revenue of $49.54 billion for the quarter. Bank of America analysts project revenues hovering around the $50 billion mark, propelled by robust advertising growth across its platforms.
The consensus on earnings per share stands at $6.71, signaling year-over-year growth even though it marks a decline from the previous quarter. The company’s recent layoff announcements and hiring freezes suggest a strategic push towards cost management, a factor many investors are watching closely.
AI-Driven Improvements Fuel Optimism
Truist analyst Youssef Squali has raised his price target for Meta stock to $900 from $880 in advance of the earnings report, maintaining a Buy rating. Squali anticipates that Meta’s results will meet or slightly exceed his estimated 22% year-over-year revenue growth.
According to the analyst, enhancements in user engagement are driven by significant AI-led improvements in ad targeting and monetization strategies, which are fostering favorable user interactions on Meta’s platforms.
Stifel analyst Mark Kelley echoed this positive outlook, sustaining a price target of $900 with a Buy rating. His analysis highlights the enduring strength of Instagram, indicating that Meta remains a strong long-term investment prospect.
Looking towards the fourth quarter, Squali forecasts management guidance will align with consensus estimates of 18% revenue growth, translating to revenues between $55 billion and $58 billion. However, tougher year-over-year comparisons may pose challenges in Q4.
Capital Spending Plans Under Scrutiny
Meta’s capital expenditure, projected at approximately $100 billion, and operating expenses expected to range between $142 billion and $146 billion, are under scrutiny as analysts gauge the impact of these spending levels. Kelley reassures investors that comfort with high spending should remain stable in the near term.
The earnings call is anticipated to shed light on the company’s capital expenditure plans for 2026. Despite potential risks associated with overly optimistic guidance, analysts believe these concerns are reasonably limited. Squali has revisited his fiscal 2026 revenue estimates to account for promising developments in wearable technologies.
Overall, Wall Street’s sentiment toward Meta remains overwhelmingly favorable leading into the earnings report. Among 46 analysts from Visible Alpha, 40 maintain a Buy rating while only six suggest a Hold rating. Notably, there are no Sell ratings present.
The average price target of $878.09 implies a 19% upside from the current trading levels. Meta stock has witnessed an uptick of over 26% in 2025, marking it as one of the top performers within the Magnificent 7 tech stocks, trailing only behind Nvidia and Alphabet.
As Meta navigates through its ambitious AI initiatives, investors are keen to see if the company can continue to deliver on these elevated expectations during Wednesday’s earnings report. The market is particularly focused on whether the anticipated growth in advertising revenue will validate the substantial infrastructure expenditures made in recent times.
