Meta Platforms (META) is experiencing a notable eight-day winning streak in stock performance as it gears up to release its third-quarter earnings report. Despite a slight dip in shares during morning trading, optimism remains high following strong second-quarter results described by one analyst as “blew the doors off.” Analysts estimate that Meta will generate sales of $49.5 billion for the September-ended quarter, indicating a substantial year-over-year growth of 22%.
This expected growth marks Meta’s highest target for the year, surpassing earlier forecasts of 14% and 13% for Q2 and Q1, respectively. In fact, Meta outperformed these projections, achieving 22% sales growth in Q2 and 16% in Q1. Furthermore, analysts predict an 11% rise in earnings, projecting earnings per share at $6.72.
The majority of Meta’s income derives from digital advertising, prominently from its Family of Apps, which includes Facebook and Instagram. Analyst Mark Kelley from Stifel expressed confidence in the digital advertising sector, which is viewed as being in a favorable position, with Meta remaining a top investment choice. Kelley noted that current checks indicate continued strength in Instagram, despite a likely focus on capital expenditures (capex) this quarter.
Meta is expected to outline its capital expenditure plans for the upcoming year during this earnings call, although last year’s Q3 report lacked specific guidance in this area. Current projections suggest that Meta’s capex could reach $96.97 billion in 2026—a 41% increase from the estimated total for 2025. CEO Mark Zuckerberg has committed to substantial investments in data centers and technology infrastructure, ensuring Meta’s leadership in artificial intelligence.
Analyst Brent Thill forecasts a 94% year-over-year increase in capex for 2025, estimating it will culminate at $72 billion, with a projection of $103 billion for the following year. He emphasized Meta’s commitment to investing in AI and noted that investors are becoming more accepting of elevated capex levels, which limits the potential negative impact on stock performance.
Although Meta’s stock has seen a year-to-date increase of 28%, it continues to lag behind its early August highs due to competition from OpenAI’s Sora app, which, following its launch, became the most-downloaded app on the Apple store. This development raises the potential for competition with Meta’s own AI features. However, Bernstein analyst Mark Shmulik suggested that Sora could ultimately benefit Meta, as it serves as a creator tool enhancing video production, which aligns with Meta’s distribution capabilities on platforms like TikTok and Instagram.
Despite the slight decline in morning trading, Meta’s stock remains above its 50-day moving average, having recently recovered from a previous downtrend. After hitting a high of 790.90 in mid-September, shares experienced a 12% drop but are now positioned in a new double-bottom base with an opportunity for rebound at a buy point of 790.80, according to IBD MarketSurge. The company’s strategic focus on AI-driven initiatives and substantial investments exhibits a forward-looking approach that could foster continued growth and innovation in the competitive tech landscape.