# Meta Shares Fall Ahead of Third-Quarter Earnings as Investors Focus on AI Spending

- URL: https://stocks.freetheai.org/news/meta-shares-fall-ahead-of-third-quarter-earnings-as-investors-focus-on-ai-61ad5a
- Published: 2026-10-20T05:38:29Z
- Category: earnings; sentiment: mixed; impact: medium
- Symbols: [NASDAQ:META](https://stocks.freetheai.org/symbols/NASDAQ-META)
- Written by our AI from expert market sources across the web for FreeTheAI Stocks, built by Vibhek Soni
- How write-ups are made: https://stocks.freetheai.org/how-we-write
- Not financial advice: https://stocks.freetheai.org/disclaimer

Meta Platforms Inc Class A (META) shares declined 0.6% on Monday to $705.44, extending a four-day losing streak even as tech stocks generally rebounded. The retreat comes as the company prepares to release its third-quarter earnings report on Wednesday after the market closes, followed by an executive conference call at 4:30 p.m. Eastern time. Analysts project quarterly revenue of $63.3 billion, which would mark roughly 24% growth compared to the prior year.

The pressure on the stock reflects investor scrutiny over whether Meta's rapid top-line growth is generating sufficient operating profit and cash flow to justify heavy capital investment. In the previous quarter, advertising brought in $59.4 billion of Meta's $60.8 billion total revenue, remaining the primary driver funding its expanding operations. Meanwhile, Morgan Stanley increased its price target on the stock from $775 to $820 with an Overweight rating, citing advertising efficiency and prospective revenue from new artificial intelligence tools and commercial subscriptions.

Traders will pay close attention to management guidance on capital expenditures, which are currently projected at $130 billion to $145 billion for 2026, alongside any outlook provided for 2027. Investors will also look for comments on commercial adoption of the newly introduced Muse Wonder AI models released on October 12, as well as Meta's broader hardware strategy featuring pocket voice devices and smart glasses integration.

## Key points

- Meta shares fell 0.6% to $705.44 on Monday, marking four consecutive sessions of declines ahead of earnings.
- Analysts expect third-quarter revenue of $63.3 billion, representing an estimated 24% year-over-year increase.
- Advertising generated $59.4 billion of Meta's $60.8 billion total revenue in the prior quarter.
- Meta maintains 2026 capital spending guidance between $130 billion and $145 billion to expand AI capacity.
- Morgan Stanley raised its price target on Meta stock to $820 from $775 while maintaining an Overweight rating.

## Questions and answers

### When does Meta report its third-quarter earnings?

Meta is scheduled to release its third-quarter financial results on Wednesday after the market closes, followed by a management conference call at 4:30 p.m. ET.

### What are Wall Street expectations for Meta's Q3 revenue?

Wall Street analysts project Meta to report $63.3 billion in third-quarter revenue, which represents a growth rate of approximately 24% compared to the same period last year.

### What is Meta's projected capital spending for 2026?

Meta's current capital expenditure guidance for 2026 is between $130 billion and $145 billion, which includes principal payments on finance leases for data center and server capacity.