Meta Platforms, Inc. (NASDAQ:META) is heading into its third-quarter report with investors weighing strong AI-driven growth against rising capital spending, legal costs and a softer broader market backdrop.
The stock fell less than a quarter of a percent in Thursday morning trading as risk appetite weakened. Nasdaq futures dropped almost 1%, while S&P 500 futures declined 0.39%.
• What should traders watch with META?
Revenue Growth Sets a High Bar
BNP Paribas analyst Nick Jones expects Meta to deliver strong top-line growth and rates the stock Outperform with an $885 price forecast, implying 20% upside from the cited $738.90 share price.
Jones believes investors expect third-quarter revenue growth of 24% to 25% year over year, above the 23% consensus estimate.
He sees GAAP diluted EPS coming in above $3.60, compared with a $6.26 consensus estimate that excludes the one-time legal expense.
Fourth-Quarter Guidance Remains In Focus
For the fourth quarter, Jones believes investors want Meta to guide revenue to $73 billion to $76 billion, compared with the $73.5 billion consensus estimate.
He also expects Meta to raise its 2026 capital spending outlook by $5 billion to $10 billion from the current $130 billion to $145 billion range, versus a $139 billion consensus estimate.
AI Monetization Supports the Bull Case
Jones expects elevated spending to continue but sees Meta generating strong revenue through AI monetization, advertising share gains, subscription revenue and its enterprise business.
He also noted Meta continues to grow daily and monthly active users despite its massive scale, although growth has slowed.
Engagement Remains a Key Strength
Jones said Meta still accounts for more than 40% of the time users spend across major social-media platforms.
He sees that engagement, along with continued product improvements and AI adoption, as supporting future monetization.
Earnings and Analyst Outlook
Meta’s next major catalyst is its estimated Oct. 28, 2026 earnings report.
The consensus EPS estimate stands at $6.28, down from $7.25 a year earlier. Revenue is expected to rise to $63.30 billion from $51.24 billion.
Meta trades at a price-to-earnings ratio of 27.2 times.
The stock carries a Buy consensus rating with an average price target of $828.30.
Wells Fargo maintained it Overweight rating and raised its price target to $1,000 on Oct. 6. Deutsche Bank maintained it Buy rating and raised its price target to $820 on Sept. 25, while Piper Sandler maintained its Overweight rating and upped its price target to $875 the same day.
ETF Exposure Adds Trading Sensitivity
Meta carries a 9.18% weight in the Invesco AI and Next Gen Software ETF (NYSE:IGPT), 8.12% in the Natixis Loomis Sayles Focused Growth ETF (NYSE:LSGR) and 7.89% in the Invesco Nasdaq Internet ETF (NASDAQ:PNQI).
Significant inflows or outflows from funds with large Meta positions can translate into corresponding buying or selling pressure on the stock.
META Price Action
Meta Platforms shares were down 0.20% at $719.88 at publication on Thursday, according to Benzinga Pro data.
Image via Shutterstock
Login to comment