Meta Platforms grew third-quarter revenue 26% to $64.60 billion and beat its own forecast, but free cash flow turned negative at $2.12 billion, its first dip below zero since the second quarter of 2012, versus $10.63 billion a year earlier. The shift reflects heavy AI spending: capital expenditure including leases reached $34.91 billion, or 54% of revenue. Meta narrowed its 2026 capex outlook to $135–145 billion. Shares fell 6.6% to $651.05 in Thursday’s morning trading, yet six of the seven firms that updated their views raised price targets, with the average $856 target implying about 26% upside from the premarket price. Trade Nation’s David Morrison said there is little clarity over when, or even if, the planned spending will generate a return.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
METAAI investmentearningsvaluationartificial intelligence
Open a keyword to see other news on the same topic.
Related tickers and likely impact
META
• NeutralMeta Platforms
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $1.9T |
| Close on 10/23/2026 | 642.26 |
| Change that session | -1.02% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Meta shares are down 9% this week. Here's why Mike Khouw is buying now
Meta shares fell during the week as investors worried about the cost of building AI infrastructure, even though the company recently reported strong earnings. The company's $1.65 trillion market cap lost $135 billion in four sessions. The author sees Muse, Meta's personal AI agent, as potentially valuable given its reach to 3.6 billion daily active users across Facebook, Instagram, WhatsApp and Messenger. Headwinds include a $25 billion lawsuit in New Mexico, a deal with the founder over potential California billionaire's tax liabilities, concerns about debt, and broader AI jitters. He argues the current valuation, at about 20x fiscal-year earnings, already prices in much of this. He outlines selling December strangles at the 580/745 strikes, collecting about $21.30 per share at today's closing prices, a position that profits anywhere between the one-year high and low.
- Meta (META) Stock Price Sinks As Q3 Results Expose AI Cash Strain
Meta Platforms shares fell about 7%, from US$697.52 to roughly US$648.85, even though Q3 2026 revenue rose 26% to US$64.6b. Net income excluding special items reached US$9.9b, more than triple the prior-year level, but investors focused on the profit squeeze from heavy AI spending and a US$9.9b legal charge tied to teen safety settlements and broader legal actions. Free cash flow turned to an outflow of roughly US$2.1b in Q3, while 2026 capex is now guided to US$135b to US$145b. The article says the stock could be a mild 13% overvalued relative to the cash flowing through the business.
- Meta Stock Climbed 25% in September. Here’s Why There’s More Upside Ahead
Meta Platforms stock gained about 25% in September, while the S&P 500 rose less than 1%, though Meta has given back some of those gains in October. Heavy AI spending has pressured profits: second-quarter revenue rose 28% year over year to $60.8 billion, but income from operations fell 8% to $18.8 billion and free cash flow dropped 91% to $784 million. The article points to positive signs, including the Muse AI agent, free up to usage limits, rising to the top of the iOS free app download charts, plans to charge retailers transaction fees, and a strong core ad business. On legal risks, Meta will pay roughly $12.7 billion to U.S. states over a 10-year period, plus $5.3 billion contingent on certain conditions, and the author argues the company is well equipped to handle its remaining lawsuits. The stock trades at 22.1x forward earnings, versus 19.1x for information technology stocks.
- How Meta Stock Can Be Both the ‘Cleanest’ AI Winner and a Risky Play
- Meta Platforms (META) Could Be 25% Undervalued After Muse AI Gains Traction
Meta Platforms (META) has drawn attention after its Muse Wonder and Muse Wonder Full AI models launched, with the Muse agent posting strong early retention. The shares have returned 17.66% over 30 days and 17.23% year to date, with a last close of $762.50. The article cites a narrative fair value of $1,018.71, which it says implies the stock is 25% undervalued, against a backdrop of $72.2 billion in 2025 capex and 2026 guidance raised to $125 billion to $145 billion. On a P/E basis, the stock trades at 28.5x earnings, above the peer average of 27x and the Interactive Media and Services industry at 10.8x. Risks highlighted include heavy capex with unproven payback, Reality Labs losses, and shifting privacy rules.
- Meta Introduces Non-Voting Shares To Fund Massive AI Expansion
Meta plans to issue a new class of non-voting shares (Class C) starting January 2027, giving each shareholder one new share for each share owned, to fund AI spending, acquisitions and retention of top talent while CEO Mark Zuckerberg keeps control. Revenue in the third quarter reached 64.6 billion USD, above the 63.37 billion USD analysts expected, and the stock rose more than 4% in pre-market trading; however, 2026 capital spending is now expected at 135-145 billion USD, leaving free cash flow negative at 2.12 billion USD in Q3 compared with positive 10.63 billion USD a year earlier. More than 10 million people in the US and Canada set up the Muse AI product in about a month and a half, and CFO Susan Li said AI businesses should add revenue in 2027. On the legal side, a New Mexico judge ordered a 25 billion USD penalty, and EPS was 3.83 USD, or 7.40 USD excluding a 9.89 billion USD settlement charge.
Related markets
Latest news
- Gold bar and gold ring prices this morning, October 24, at SJC, PNJ, DOJI, Bao Tin Minh Chau and Bao Tin Manh Hai
International gold prices fell below $4,000 an ounce as inflation expectations weighed on the market. On the morning of October 24, SJC, PNJ, DOJI and Bảo Tín Mạnh Hải quoted gold bars at 139–142 million VND per lượng, with all six brands surveyed selling at 142 million, though buy-in prices differed by up to 1.6 million. DOJI had the highest sell price for 9999 gold rings at 141.5 million VND per lượng, while SJC was lowest at 139 million. The University of Michigan's October consumer sentiment index reached 48 points, above the 46.3 forecast but nearly unchanged from last month, as inflation expectations kept rising. The article notes this could lift demand for gold as a store of value, but if inflation stays high, the Fed may keep policy tight and pressure precious metals.
- Procter & Gamble's Earnings Show a Resilient Consumer Despite Price Hikes. Is the Dividend King Stock a Buy?
Procter & Gamble shares jumped 5.6% Thursday, their best day in more than six years, after a stronger-than-expected fiscal first quarter with 4% organic sales growth and $23.3 billion in revenue, above the $22.8 billion estimate. Core gross margin fell 150 basis points on higher commodity costs tied to oil prices, but core EPS of $2.00 beat the $1.89 consensus, and the company kept its full-year core EPS guidance at $6.89–$7.11. The article describes P&G as a defensive, Dividend King stock with 70 straight years of dividend increases and a 2.6% yield, but notes the shares have been mostly flat over five years. It says headwinds from commodity and oil costs are expected to increase over the rest of the year, so the upside potential appears moderate.
- Will Anthropic pull off a November IPO ? Time is running out to file key paperwork .
Anthropic, maker of the Claude chatbot, reportedly plans a mid-November IPO at a valuation of as much as $2 trillion, which would exceed SpaceX's $1.77 trillion debut earlier this year. Under SEC rules requiring a public prospectus at least 15 days before a roadshow, it would need to file by about late next week to keep that timetable, though a delay is possible. Analysts are divided: one portfolio manager said the company could stay private if inflation and high energy prices keep building, while another said the market needs a successful offering. A Wall Street Journal report on its draft prospectus cites up to $750 billion in planned AI compute spending and a first-half 2026 net loss above $80 billion, largely from accounting adjustments. Prediction markets show an 80% chance of an IPO by year-end.
- Trump signs executive order lowering housing costs
President Trump signed an executive order aimed at lowering housing costs ahead of the midterm elections, as inflation and affordability are among voters' top concerns. The order directs the FHFA director to launch a pilot program to proactively cancel mortgage insurance premiums for borrowers who meet equity requirements based on current market value, and to expand cheaper alternatives to title insurance and reduce refinancing closing costs. The Departments of Veterans Affairs and Agriculture must cut interest rates on single-family home loans, and a multiagency task force will be created to lower building costs and raise the quality of manufactured homes eligible for federal programs. The move comes as the housing market slows and lending costs rise, with inflation climbing to 3.7% last month while wage gains have been largely flat this year. An NBC News Decision Desk poll found that 31% of U.S. adults named the economy as their top concern.
- Trump signs executive order lowering housing costs
President Trump signed an executive order aimed at lowering housing costs ahead of the midterm elections, as inflation and affordability are among voters' top concerns. The order directs the FHFA director to launch a pilot program to proactively cancel mortgage insurance premiums for borrowers who meet equity requirements based on current market value, and to expand cheaper alternatives to title insurance and reduce refinancing closing costs. The Departments of Veterans Affairs and Agriculture must cut interest rates on single-family home loans, and a multiagency task force will be created to lower building costs and raise the quality of manufactured homes eligible for federal programs. The move comes as the housing market slows and lending costs rise, with inflation climbing to 3.7% last month while wage gains have been largely flat this year. An NBC News Decision Desk poll found that 31% of U.S. adults named the economy as their top concern.
- Trump signs executive order lowering housing costs
President Trump signed an executive order aimed at lowering housing costs ahead of the midterm elections, as inflation and affordability are among voters' top concerns. The order directs the FHFA director to launch a pilot program to proactively cancel mortgage insurance premiums for borrowers who meet equity requirements based on current market value, and to expand cheaper alternatives to title insurance and reduce refinancing closing costs. The Departments of Veterans Affairs and Agriculture must cut interest rates on single-family home loans, and a multiagency task force will be created to lower building costs and raise the quality of manufactured homes eligible for federal programs. The move comes as the housing market slows and lending costs rise, with inflation climbing to 3.7% last month while wage gains have been largely flat this year. An NBC News Decision Desk poll found that 31% of U.S. adults named the economy as their top concern.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.