Meta reported third-quarter revenue up 26% year over year to $64.6 billion, above the top of its guidance, and said it plans to issue one non-voting Class C share for each Class A and Class B share, which it expects to act like a 2-for-1 split, effective January 19, 2027. The company said Class C stock could be used to raise capital, pay employees and make acquisitions without diluting voting power, though CFO Susan Li said no specific financing plans were announced. Capital expenditures rose to $34.9 billion, pushing free cash flow to negative $2.1 billion, while operating income fell 37% to $13 billion because of a $9.9 billion legal charge. With shares near $698, Meta trades at about 21 times 2027 earnings estimates, and the author argues the valuation still looks reasonable given revenue growth above 25%.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
METAearningsstock splitvaluation
Open a keyword to see other news on the same topic.
Related tickers and likely impact
META
▲ Likely positiveMeta Platforms
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $1.9T |
| Close on 10/22/2026 | 648.85 |
| Change that session | -6.98% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Meet Wall Street's Newest Major Stock Split: It Has Soared 1,730% Since Its 2012 IPO, and There Is Plenty of Upside Left
Meta Platforms announced a stock split with its third-quarter results, creating a non-voting Class C stock with one new share for each existing share, which the company says will help raise capital without diluting CEO Mark Zuckerberg's voting control. Revenue rose 26% year over year to $64.6 billion and EPS reached $3.83, up 265%, while operating income fell 37% to about $13 billion because of a $9.89 billion legal charge; excluding that charge, it would have risen 11%. The charge relates to a settlement of up to $18 billion over 10 years with a bipartisan group of state attorneys general over lawsuits about harm from its social media platforms. Daily active people rose 3% to 3.64 billion, and more than 10 million people in the U.S. and Canada have set up the Muse AI agent, with about 25% using it on any given day. The article says Meta's AI push could diversify its revenue, though its core advertising business still generates most of it.
- Buy, Hold, or Sell Meta Stock After Q3 Earnings & Stock Split Announcement?
Meta Platforms (META) shares fell on Thursday despite third-quarter results that beat expectations, as investors weighed rising AI spending, negative free cash flow and legal costs. Revenue rose 26% year over year to $64.6 billion, above the roughly $63.4 billion expected, and EPS excluding a $9.89 billion legal settlement charge was $7.40 versus $6.52 expected. Capital expenditures reached $34.91 billion and free cash flow turned negative at $2.12 billion, while the full-year capex outlook was narrowed to $135–145 billion. Meta also faces a $25 billion judgment in a New Mexico privacy case, which it plans to appeal, and expects fourth-quarter revenue of $73–76 billion, in line with consensus of $73.65 billion. The company also announced a 2-for-1 stock split in January 2027 through non-voting Class C shares, which the article says would not change overall market value.
- Meta has big plans for its Muse AI agent
Meta reported better-than-expected third-quarter results with record revenue and announced a 2-for-1 stock split, under which shareholders receive one new Class C share for each share held. The highlight was its Muse AI agent: about 10 million people in the US and Canada have set up the app since launch, mostly for shopping, with average purchases above $200. Zuckerberg said Meta would earn revenue by taking a small cut of sales made through the agent and that compute efficiency could improve 10x within a year, which he believes could make Muse highly profitable over time. TD Cowen's John Blackledge estimates Muse could exceed 1 billion daily active users within five years, and Meta's leadership suggests it could happen sooner.
- Meta's new nonvoting shares create an overhang — and Wall Street wants it gone
Meta created a new class of nonvoting Class C stock that works like a 2-for-1 split, giving every Class A or Class B holder one Class C share, with trading slated to begin in January 2027. The structure lets Mark Zuckerberg raise outside capital for the AI build-out without diluting his voting control, a move partly designed to keep him working in California as a 5% billionaire's tax looms. JPMorgan analyst Doug Anmuth said issuing the stock sooner is better, as it would remove the overhang now that the Street knows nonvoting shares are coming in January 2027. Core advertising revenue rose 26% to $64.6 billion and GAAP EPS of $3.83 beat the $3.56 estimate, but shares fell 2% in premarket trading on Thursday. Anmuth called the stock move near-term noise and remained encouraged by the 2027 revenue outlook.
- Meta Delivers Another Blowout Earnings Report. Here's What Investors Need To Know
Meta reported third-quarter revenue up 26% to $64.6 billion, above the $63.4 billion expected, with ad impressions up 10% and average price per ad up 14%. Reported EPS was $3.83 after an $18.59 billion litigation settlement over teen health and a related $9.89 billion charge; excluding these, operating income would have been $22.9 billion and EPS $7.40. Headcount fell about 15% after roughly 10,000 layoffs earlier this year, and Reality Labs' loss is expected at $18–19 billion, narrowing to around $15 billion next year. Zuckerberg said more than 10 million people in North America have set up Muse personal agents and that Muse could eventually double the company's revenue. Meta will also split its stock 2-for-1 through a new non-voting Class C share dividend, executed on January 19, 2027, with shares trading around $700.
- Meta Platforms Q3 Earnings Call Highlights
Meta Platforms’ third-quarter revenue rose 26% to $64.6 billion on stronger advertising demand, higher engagement and AI-driven improvements, with ad impressions up 10% and the average price per ad up 14%. Expenses jumped 68% to $51.6 billion, including a $9.9 billion charge tied to an August 2026 agreement with multiple state attorneys general, pulling GAAP operating income down 37% to $13 billion. Excluding the legal charge, CFO Susan Li said operating income would have risen 11% year over year, while capital expenditures of $34.9 billion pushed free cash flow to negative $2.1 billion. Meta forecast fourth-quarter revenue of $73 billion to $76 billion and announced a two-for-one stock split expected to begin trading in late January 2027. CEO Mark Zuckerberg said more than 10 million people in the U.S. and Canada had set up its Muse AI agent in roughly six weeks, with shopping the most common use case.
Related markets
Latest news
- Down Roughly 50% From Its Highs, Is Netflix Stock Finally a Buy?
Netflix (NFLX) shares have fallen roughly 50% from their all-time closing high of $133.91 on June 30, 2025, following the company's third-quarter report. Before the report, Netflix fired its chief content officer and announced its largest layoff since 2022, hiring former Disney executive Peter Rice as it struggled to produce U.S. blockbuster shows. In Q3, revenue rose 12% to $12.87 billion and adjusted EPS jumped 49% to $0.87, above the $0.82 analyst estimate compiled by LSEG. Netflix guided Q4 revenue to $13.4 billion but trimmed full-year revenue to $51.1 billion and cut its ad revenue forecast from $3 billion to $2.7 billion due to a slower ad rollout. The article argues that at a forward P/E of about 17 times 2027 estimates, the valuation now looks attractive.
- Police and protesters clash in Paris as demonstrations break out across Europe
Demonstrations took place in many European cities on Saturday, from Milan to Madrid, while in Paris clashes erupted near the march's endpoint at Porte de Vincennes, where police fired tear gas and used water cannons. The Interior Ministry put nationwide turnout at 410,000, including 110,000 in Paris, and police used tear gas in Lyon, Clermont-Ferrand and Strasbourg and water cannons in Nice and Nantes. Crowd estimates in Marseille differed sharply: police counted 17,000 while the CGT union said 100,000. Education Ministry figures showed 15.4 million teaching hours lost in the 2024-25 school year because absent teachers were not replaced, equal to 7.5% of scheduled time. The unrest is testing President Macron's authority before voters choose his successor in May, and the far-right National Rally has urged people to channel their anger into votes for it.
- U . S . Senate candidate Peltola calls the economy the only plot line that matters
Former U.S. Rep. Mary Peltola, a Democrat, has made the economy her top priority in her close race against Republican Sen. Dan Sullivan in Alaska, where spending has topped $100 million. She says rising prices for fuel, food, health insurance, utilities and rent are voters' main concern, and has said the Iran war should not progress in order to ease energy costs. Her proposals include eliminating income taxes for Americans earning less than $92,000 a year by raising taxes on the ultra-wealthy, increasing the Child Tax Credit and making Social Security solvent. Economists say Alaskans are feeling squeezed by record-high diesel and heating fuel prices, and Peltola cited a Selawik household with a $1,500 electric bill. Sullivan, who has backed the president's policies and argues he has cut taxes and expanded oil drilling, has an estimated net worth of $8.2 million, partly from holdings in RPM International.
- Abbott Laboratories vs . UnitedHealth : Does Health Innovation or Health Insurance Make for a Better Stock to Buy ?
The article compares Abbott Laboratories (ABT), a maker of medical devices, diagnostics and nutrition products, with UnitedHealth Group (UNH), which runs the UnitedHealthcare insurance arm and Optum health services. In FY 2025 Abbott's revenue rose about 6% to $44.3 billion, but net income fell to about $6.5 billion from $13.4 billion, largely due to a $385 million settlement. UnitedHealth's revenue grew nearly 12% to about $447.6 billion, while net income dropped to about $12.1 billion from $14.4 billion, a net margin of about 2.7%. Medicaid and Medicare premiums made up 44% of UnitedHealth's 2025 revenue, exposing it to government policy, while Abbott faces FDA oversight and debt from its $20 billion acquisition of Exact Sciences. Free cash flow was about $7.4 billion for Abbott and about $16.1 billion for UnitedHealth in FY 2025.
- Voters angry about high prices may get little relief from the next Congress
The article argues that voters expecting a new Democratic Congress to lower prices may be disappointed, since the main drivers of inflation are the Iran war's impact on energy prices, the AI boom and President Donald Trump's trade policies. Even if Democrats win control of the House and Senate on Nov. 3, they are unlikely to end the war or Trump's tariffs. Consumer prices are up 30 percent since the start of the pandemic, three times the increase of the prior six years, and over the past year they rose more than twice as fast as typical earnings, according to the BLS. Economists surveyed by Bloomberg expect inflation to slow to a 2.4 percent annual rate by fall 2027, but prices would still be rising from already high levels. Goldman Sachs expects leading hyperscalers including Alphabet, Microsoft and Meta to spend a combined $1.2 trillion in 2027, up from around $800 billion this year, while the federal budget deficit of almost $2 trillion also contributes to rising prices.
- Paraguay Joins Pax Silica , the US AI Supply Chain Pact
On 23 October, Paraguay became the 26th signatory of the US-led Pax Silica declaration, a pact to build AI and chip supply chains among trusted partners. Washington and Asunción pledged to use Paraguay's critical minerals and hydropower for AI infrastructure, tying the small ally to the US effort to reduce dependence on China. A separate 15-year power contract signed on 22 October covers up to 286 megawatts for an AI data centre at US$48.91 to US$56.39 per megawatt hour. No projects, deadlines, investments or companies have been named, and the declaration is a statement of intent rather than a treaty. The first 6 megawatts of data centre power are due on 1 December.
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.