Meta Platforms is doubling down on its massive AI investments, raising the lower end of its 2026 capital expenditure guidance from $130 billion to $135 billion. The company now expects to spend $135 billion to $145 billion this year, above Wall Street’s $132.08 billion estimate.
The spending is putting significant pressure on profitability. Meta reported negative free cash flow of -$2.12 billion in Q3, while its operating margin plunged to 20% from 40% a year earlier.
However, the company’s core advertising business remains strong. Advertising revenue surged 26% year over year to $63.06 billion, supported by a 10% increase in ad impressions and a 14% jump in average ad pricing.
Meta also guided for fourth-quarter revenue of $73 billion to $76 billion, compared with Wall Street’s $73.68 billion estimate.
The big takeaway: Meta’s advertising engine continues to deliver impressive growth, but investors are increasingly being asked to tolerate enormous AI spending and weaker near-term cash flow.
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That wraps up our initial coverage of Meta’s Q3 results. Thank you for stopping by!
4:03pm ET
We hit major milestones this quarter toward delivering personal superintelligence for everyone - including launching Muse and Muse Wonder, our first frontier model.
Meta now has its own frontier model family in the market, putting the heaviest AI capex budget in big tech to a direct test against OpenAI and Google. Shares are up 0.2% since the Q3 earnings remarks.
Q3 2026
4:03pm ET
A $9.89 billion teen mental health settlement charge sits inside the quarter, and excluding it diluted EPS would have been $7.40, so the EPS miss is a legal bill rather than a business problem. Revenue beat consensus by 1.9%, and management guided Q4 revenue to $73 billion to $76 billion.
Thesis check
4:10pm ET
Pricing power tips it: a 14% increase in average ad price alongside 10% more impressions is the clean evidence that AI-driven ranking is monetizing, and it survives an EPS miss that traces mostly to the litigation charge. Expectations we flagged at 3:10pm pointed to a 14% chance of a beat and the quarter missed expectations, yet the stock held. A Q4 revenue figure below the $73 billion floor would flip this to weakening.
Meta Platforms (NASDAQ: META) just reported third-quarter earnings, with shares initially up 2% following the report. Here are the key numbers:
Quick Read:
Meta shares are initially rising despite the earnings miss, suggesting investors may be focusing on the company’s strong revenue growth.
Valuation · as of Oct 21
3:57pm ET
Going into tonight's report, Meta trades at 26.6 times trailing earnings and 20.6 times forward, a discount to its own 28% revenue growth that only holds if margins survive the capex build. At $698.20 the stock sits about 10% below its $779.82 high, with the $819 consensus target implying 17% upside from here.
Last quarter — Q2 2026
2:55pm ET
In Q2, revenue kept growing while AI infrastructure and legal costs pushed earnings to a miss of expectations. Q3 margins and the capex outlook matter more than another revenue beat.
$797$658$520
Reported Wed, Jul 29 · next print Wed, Oct 21
Reddit hype check
3:20pm ET
Retail boards are surprisingly quiet into tonight's report: 58 qualified mentions over the past week with sentiment sitting neutral, with Meta's AI spending drawing little attention. Treat it as a crowd that hasn't picked a side yet on the quarter.
63.034.05.00
Prediction markets
3:10pm ET
Traders on Polymarket are pricing only a slim chance Meta clears the GAAP EPS bar tonight, unusual skepticism for a company that routinely tops estimates. The pricing points to AI infrastructure and legal costs weighing on the bottom line. Volume is thin, so the market reflects sentiment more than conviction.
Options positioning
3:05pm ET
A 0.64 put/call ratio ahead of tonight's report says call buyers outnumber put buyers, the direct read being traders leaning toward upside, though skew that one-sided can also leave the most room for disappointment. Still, 127.3% at-the-money implied volatility on options expiring today prices in a violent reaction either way, and the 700 strike holds 217 puts against 16 calls, the clearest wall just above the money.
33 / 1
22 / 0
16 / 0
20 / 1
2 / 0
217 / 16
Technical setup
3:16pm ET
Meta Platforms goes into tonight's earnings report at $703.02, above both its 50-day ($661.67) and 200-day ($632.67) averages. The level that decides the post-earnings move is $747.60 resistance; clearing it brings the $779.82 52-week high into range, while missing expectations leaves open air down to $595.80 support.
Call preview · Q3 2026
2:50pm ET
Analysts have pressed Meta on AI capex and its return in each of the last four calls, and tonight's after-the-bell call is where that thread meets a quarter in which spending guidance already set the bar. The newer question, enterprise AI as an actual revenue line, has now come up three calls running, so management's answer there is the one most likely to move the stock after the earnings report.
Meta Platforms is expected to report third-quarter earnings after the bell tonight at 4:00 PM ET, with Wall Street watching whether the company’s massive AI investments are starting to deliver meaningful returns.
Analysts expect earnings of $5.70 per share, down from $7.25 a year ago, as AI infrastructure spending and legal expenses weigh on profitability.
Meta’s full-year capital expenditure guidance of $130 billion to $145 billion is raising questions about free cash flow, which fell to just $784 million last quarter.
Meta’s advertising business remains incredibly strong. Last quarter, ad impressions jumped 14% while average pricing increased 12%, suggesting AI investments may already be improving monetization.
With Meta valued at roughly $1.56 trillion, investors will be looking for evidence that revenue growth can outpace rising costs. Strong advertising results and stable margins could reassure Wall Street, while another expense surprise could reignite concerns about Meta’s enormous AI spending.
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