Meta Platforms heads into its third-quarter earnings report on Wednesday with shares under pressure, extending a losing streak to five sessions as investors weigh aggressive artificial intelligence spending against long-term revenue potential.
The stock slipped about 2% on Tuesday and has fallen more than 12% from its recent peak of $779.82 reached late last month. For the year, Meta remains up about 9%, according to Morningstar. Wall Street expects third-quarter EPS of $6.66 and revenue of $63.34 billion, up roughly 24% year-over-year. Morgan Stanley raised its price target to $820 from $775 and kept a Buy rating, implying about 15% upside. Deutsche Bank also maintained a Buy rating with an $820 target and raised its third-quarter revenue estimate to $63.7 billion from $63.1 billion.
Analysts are focused on Meta's 2026 capital expenditure guidance of $130 billion to $145 billion, roughly double the previous year's spending. Visible Alpha data put capital expenditure at $41.68 billion for the September quarter. The company's free cash flow could turn negative in the second half, and investors remain cautious after Meta shares fell around 8%-9% last quarter when EPS of $6.18 missed expectations of $7.22.
Meta's Muse AI agent is a key growth opportunity. It has accumulated 10.9 million downloads since its September 8 launch, according to Sensor Tower. Deutsche Bank's Benjamin Black sees Muse potentially accounting for up to 8% of Meta's revenue by 2030, equivalent to about $36 billion in sales. UBS raised its price target to $884 from $715, while Guggenheim lifted its target to $850 from $700. Goldman Sachs took a more cautious view, cutting its target to $762 from $860 on concerns about rising operating expenses in 2027.
Wednesday's report will be closely watched for Muse adoption trends, monetization details, and any updates on 2027 capital expenditure. For crypto markets, Meta's AI infrastructure spending and broader technology sentiment can influence risk appetite, but this earnings event does not directly affect any specific cryptocurrency.
