BUZZ-PREVIEW: Meta stock rises as investors focus on spending in the artificial intelligence sector

October 21 - ** On Wednesday, Meta Platforms (META.O) shares rose 1.9% to $707.37, with the company set to release its quarterly report after the market closes. Investors are closely watching how its increased AI investment is affecting its financial situation.

** According to data from London Stock Exchange Group (LSEG), the Facebook parent company is expected to report a 24% year-on-year increase in quarterly revenue to $63.37 billion, while adjusted earnings per share are expected at $5.75, down from $7.25 a year ago.

** Evercore ISI analyst Mark Mahaney and other analysts noted in a research report that Wall Street’s expectations for Meta’s Q3 are reasonable, stating: “META is still viewed as one of the largest platforms that will benefit most from performance budget consolidation. Market research shows its advertising spend, return on investment (ROI), and market share are all trending up quarter-over-quarter.” Evercore rates the stock as “outperform.”

** In the second quarter, Meta reported (link) that its free cash flow dropped by 91% and raised the lower end of its 2026 capital expenditure forecast, which intensified concerns in the market over its high-cost AI investments.

** Before the earnings release, investors were also digesting news on Wednesday about Meta (link): a New Mexico judge ruled that the company must pay $25 billion after a jury found that, in a case involving a political consulting firm associated with Donald Trump’s 2016 presidential campaign, the company misled consumers when the firm obtained the data of millions of Facebook users without their consent.

** Overall, according to LSEG data, analyst ratings include 56 “strong buy” or “buy” ratings, 6 “hold” ratings, and 1 “sell” rating.

** Year-to-date, the stock is up about 7%, underperforming the Nasdaq .IXIC index, which has gained around 15%.

(To facilitate non-native English speakers, Reuters has automatically translated this report into several other languages. As automated translation may contain inaccuracies or lack the intended context, Reuters does not guarantee the accuracy of the automated translation. It is provided solely for the convenience of readers. Reuters accepts no responsibility for any harm or loss arising from the use of the automated translation.)