Meta to Report Q3 Earnings Wednesday; Analysts Expect Record Revenue Amid AI-Driven Growth
Meta Platforms is set to announce its third-quarter earnings on Wednesday after the market closes, with Wall Street anticipating record revenue fueled by strong advertising gains and AI advancements.
**Analyst Expectations and Revenue Forecast**
Analysts expect Meta to report revenue of approximately $49.54 billion for Q3, marking a new company record. Bank of America analysts have projected revenues close to $50 billion, driven largely by robust advertising performance across Meta’s platforms. The consensus earnings per share (EPS) estimate stands at $6.71, reflecting solid year-over-year growth, though slightly down from the previous quarter.
Recent reports of layoffs and hiring freezes suggest Meta is actively managing costs amid increased spending. Heavy investments in data center expansion and competitive compensation to attract AI talent have raised investor expectations for meaningful returns.
**AI-Driven Improvements Fuel Optimism**
Wall Street remains bullish ahead of the report. Truist analyst Youssef Squali raised his price target to $900 from $880, maintaining a Buy rating. Squali expects Meta to meet or slightly exceed his 22% year-over-year revenue growth forecast. He attributes this optimism to AI-powered improvements that enhance ad targeting and efficiency through better ranking and recommendation systems, leading to stronger monetization and sustained user engagement.
Similarly, Stifel analyst Mark Kelley reaffirmed his $900 price target and Buy rating, highlighting continued strength on Instagram and viewing Meta as a compelling long-term investment.
Looking ahead to Q4, Squali anticipates Meta’s management guidance to align with consensus estimates of around 18% revenue growth, equating to revenues between $55 billion and $58 billion. However, tougher year-over-year comparisons are expected in the upcoming quarter.
**Capital Expenditure and Spending Outlook**
Meta has increased its capital expenditure projections twice this year to support ambitious AI initiatives, including new data centers and talent acquisition. The company’s capital expenditure outlook is currently around $100 billion, with operating expenses projected between $142 billion and $146 billion.
Mark Kelley noted that investors have grown more comfortable with these elevated spending levels in the near term. He also expects discussion around Meta’s 2026 capital expenditure plans to be a focal point during the earnings call but believes downside risk from overly aggressive guidance remains limited. Squali has also adjusted his fiscal 2026 revenue estimates higher, factoring in better-than-expected traction in the wearables segment.
**Wall Street Sentiment and Stock Performance**
Wall Street sentiment remains overwhelmingly positive. Among 46 analysts surveyed by Visible Alpha, 40 have a Buy rating on Meta shares, with only six rating the stock as Hold—no analysts currently rate it as Sell. The average price target across analysts is $878.09, implying approximately 19% upside from recent trading prices.
Meta stock has gained more than 26% so far in 2025, ranking it among the best-performing stocks within the “Magnificent 7” tech group, trailing only Nvidia and Alphabet. The company has successfully convinced investors to back its AI ambitions more strongly than many of its tech peers this year.
**What to Watch for in the Earnings Report**
Wednesday’s earnings release will be closely watched to see if Meta can sustain its advertising revenue growth and justify the substantial investments into AI infrastructure. Investors will focus on whether the company’s AI-driven improvements continue to enhance monetization and engagement, ultimately delivering the returns demanded by its record capital spending.
The results will provide critical insight into how Meta is navigating the evolving digital advertising landscape and positioning itself for future growth through AI innovation.
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