TLDR
- Meta reports Q3 earnings Wednesday after market close with analysts expecting record revenue of $49.54 billion from strong advertising gains
- Wall Street consensus predicts earnings per share of $6.71, showing year-over-year growth but a decline from the previous quarter
- Meta expanded capital expenditure projections twice this year to fund AI data centers and talent, raising investor expectations for returns
- Analysts are overwhelmingly bullish with 40 Buy ratings and only 6 Hold ratings, targeting an average price of $878 representing 19% upside
- Truist raised its price target to $900 while Stifel maintained its $900 target, both citing AI-driven improvements in ad targeting and platform engagement
Meta Platforms faces its latest test Wednesday when it reports third-quarter earnings after the market closes. The social media company has expanded its capital expenditure forecasts twice this year to support ambitious AI projects.
Wall Street expects revenue of $49.54 billion for the quarter. This would mark a record high for the company. Bank of America analysts are calling for revenues around $50 billion driven by advertising gains.
The consensus estimate for earnings per share sits at $6.71. This represents year-over-year growth but marks a decline from the previous quarter. Recent reports of layoffs and hiring freezes suggest the company may be working to control costs.
Meta has spent heavily on data center buildouts and compensation packages to attract AI talent. These investments have raised the bar for what investors expect from the results. The company now needs to demonstrate that its spending is generating meaningful returns.
AI-Driven Improvements Fuel Optimism
Truist analyst Youssef Squali lifted his price target to $900 from $880 ahead of the earnings report. He maintains a Buy rating on the stock. Squali expects Meta’s results to meet or slightly exceed his 22% year-over-year revenue growth estimate.
The analyst points to improved monetization from better ranking and recommendations. These enhancements stem from AI-led improvements that are driving better ad targeting and efficiency. User engagement remains solid across Meta’s platforms.
Stifel analyst Mark Kelley also holds a $900 price target with a Buy rating. He continues to view Meta as a top long-term pick. Kelley’s research indicates continued strength on Instagram.
For the fourth quarter, Squali expects management guidance to bracket consensus estimates of 18% revenue growth. This translates to revenue between $55 billion and $58 billion. The company faces tougher year-over-year comparisons in Q4.
Capital Spending Plans Under Scrutiny
Meta’s capital expenditure outlook stands at approximately $100 billion. Operating expenses are projected between $142 billion and $146 billion. Kelley believes investors have become more comfortable with elevated spending levels in the near term.
The analyst expects 2026 capital expenditure plans to take center stage during the earnings call. However, he thinks downside risk from higher-than-expected guidance is reasonably limited. Squali adjusted his fiscal 2026 revenue estimates to reflect better traction with wearables.
Wall Street’s stance on Meta remains overwhelmingly positive heading into the report. Out of 46 analysts surveyed by Visible Alpha, 40 rate the stock as Buy while only 6 recommend Hold. Not a single analyst rates it as Sell.
The average price target of $878.09 implies 19% upside from recent trading levels. Meta stock has gained over 26% in 2025. This makes it one of the better performers among the Magnificent 7 tech stocks, trailing only Nvidia and Alphabet.
Meta has convinced investors to support its AI ambitions better than many tech peers this year. Wednesday’s results will show whether the company can continue meeting elevated expectations. The focus will be on whether advertising revenue growth justifies the massive infrastructure investments.
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