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For the third quarter of 2026, Meta Platforms expects revenues between $61 billion and $64 billion. The forecast assumes foreign currency will create an approximately 1% headwind to year-over-year revenue growth.
The Zacks Consensus Estimate for the third quarter of 2026 revenues is pegged at $63.24 billion, suggesting a year-over-year increase of 23.42%. The consensus mark for earnings stands at $6.54 per share, down 1.94% over the past 30 days, suggesting a decline of 9.79% from the figure reported in the year-ago quarter.
Meta Platforms’ earnings beat the Zacks Consensus Estimate in the trailing three quarters while missing the same in one occasion, with the average surprise being 3.46%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Meta Platforms’ third-quarter performance is expected to have benefited from strong advertising demand, improving user engagement and continued adoption of artificial intelligence (AI)-powered advertising solutions across its Family of Apps. The company’s investments in AI-driven recommendation systems are expected to improve content discovery and increase user engagement across Facebook and Instagram. In the second quarter of 2026, advertising impressions increased 14% year over year, while the average price per ad rose 12%. These trends are expected to have supported advertising revenue growth in the to-be-reported quarter.
The company’s growing adoption of AI-powered advertising solutions, particularly Advantage+, is expected to have driven advertising revenues. Advantage+ surpassed $75 billion in annual revenue run rate in the second quarter of 2026. Improvements in AI-powered ad ranking, conversion optimization and creative generation are expected to have strengthened advertiser returns and support advertising spending in the to-be-reported quarter.
Increasing engagement across Instagram, Facebook, Threads and WhatsApp is expected to have benefited META’s third-quarter performance. AI-driven content recommendations and Reels improvements are boosting user engagement and monetization opportunities. Expanding advertising on Threads and WhatsApp, along with growing adoption of paid messaging and business agents, is expected to have created additional revenue opportunities.
Meta Platforms’ expanding AI ecosystem, supported by Muse models and Meta AI, is expected to have strengthened user engagement and advertising effectiveness in the quarter to be reported. Growing adoption of AI creative tools, Meta Business Agents and subscription offerings is likely to have benefited the company’s top-line growth in the to-be-reported quarter.
However, rising infrastructure investments, AI-related spending and operating expenses are expected to have pressured third-quarter profitability. Higher depreciation, data center expenses and AI talent costs could constrain margins. Foreign currency headwinds and ongoing regulatory challenges are additional concerns.
META Shares Underperform Sector; Valuation Stretched
META shares have rallied 7.5% year to date (YTD), underperforming the Zacks Computer & Technology sector’s 15.8% gain.
However, META’s shares have outperformed its peers in the advertising space, which includes Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , and Snap (SNAP - Free Report) . While Snap shares have plunged 24%, Alphabet and Amazon shares have gained 8.8% and 8.3%, respectively, in the year-to-date period.
META Stock Performance
Image Source: Zacks Investment Research
Meta Platforms’ current valuation is stretched, as suggested by the Value Score of D.
On a forward 12-month price/sales basis, META is trading at 6.1X, higher than the Zacks Internet Software industry’s 4.22X, Snap’s 1.41X and Amazon’s 2.91X, but lower than GOOGL’s 7.77X.
META Valuation
Image Source: Zacks Investment Research
META Leverages AI to Boost Growth, Higher Capex Hurts
META’s long-term growth prospects are supported by its expanding AI ecosystem, growing enterprise opportunities and investments in next-generation computing infrastructure. The company is investing in advanced AI capabilities through Meta Superintelligence Labs, focusing on developing increasingly sophisticated models that can power next-generation consumer and enterprise applications.
The company’s expanding enterprise AI initiatives are expected to drive long-term revenue growth. Meta Platforms is developing AI-powered coding and productivity tools, expanding its Muse Spark API offerings and exploring opportunities to monetize computing capacity directly. These initiatives are expected to diversify revenues beyond advertising and strengthen its presence in the rapidly growing enterprise AI market.
The company’s investments in custom silicon, data centers and network infrastructure are expected to strengthen its competitive position. Meta Platforms is prioritizing computing capacity expansion through 2027 while establishing infrastructure foundations to support growth in 2028 and beyond. Its strategic venture with BlackRock to develop a 1-gigawatt data center in Texas further supports these expansion plans.
However, elevated capital expenditures remain a major concern. Meta Platforms expects 2026 capital expenditures between $130 billion and $145 billion, reflecting aggressive investments in AI infrastructure, data centers and computing capacity. These investments are expected to increase depreciation, infrastructure operating costs and financial commitments, potentially pressuring margins and free cash flow.
Meta Platforms acknowledges that AI and Reality Labs investments are reducing cash flow, operating margins and profitability and expects spending to continue increasing. Reality Labs reduced 2025 operating profit by approximately $19.19 billion, and 2026 Reality Labs operating losses are expected to remain similar to 2025 levels.
Conclusion
Meta Platforms appears well-positioned heading into its third-quarter 2026 earnings release, supported by strong advertising demand, expanding AI capabilities and improving user engagement. However, elevated capital expenditures, margin pressure and premium valuation remain concerns. Meta Platforms’ third-quarter 2026 results and management’s commentary on AI spending, capital allocation and monetization progress will likely play a crucial role in determining the stock’s near-term direction.
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Image: Bigstock
Should You Buy, Sell, or Hold META Stock Before Q3 Earnings Release?
Key Takeaways
Meta Platforms (META - Free Report) is set to report its third-quarter 2026 results on Oct. 21.
For the third quarter of 2026, Meta Platforms expects revenues between $61 billion and $64 billion. The forecast assumes foreign currency will create an approximately 1% headwind to year-over-year revenue growth.
The Zacks Consensus Estimate for the third quarter of 2026 revenues is pegged at $63.24 billion, suggesting a year-over-year increase of 23.42%. The consensus mark for earnings stands at $6.54 per share, down 1.94% over the past 30 days, suggesting a decline of 9.79% from the figure reported in the year-ago quarter.
Meta Platforms’ earnings beat the Zacks Consensus Estimate in the trailing three quarters while missing the same in one occasion, with the average surprise being 3.46%.
Meta Platforms, Inc. Price and EPS Surprise
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Meta Platforms’ third-quarter performance is expected to have benefited from strong advertising demand, improving user engagement and continued adoption of artificial intelligence (AI)-powered advertising solutions across its Family of Apps. The company’s investments in AI-driven recommendation systems are expected to improve content discovery and increase user engagement across Facebook and Instagram. In the second quarter of 2026, advertising impressions increased 14% year over year, while the average price per ad rose 12%. These trends are expected to have supported advertising revenue growth in the to-be-reported quarter.
The company’s growing adoption of AI-powered advertising solutions, particularly Advantage+, is expected to have driven advertising revenues. Advantage+ surpassed $75 billion in annual revenue run rate in the second quarter of 2026. Improvements in AI-powered ad ranking, conversion optimization and creative generation are expected to have strengthened advertiser returns and support advertising spending in the to-be-reported quarter.
Increasing engagement across Instagram, Facebook, Threads and WhatsApp is expected to have benefited META’s third-quarter performance. AI-driven content recommendations and Reels improvements are boosting user engagement and monetization opportunities. Expanding advertising on Threads and WhatsApp, along with growing adoption of paid messaging and business agents, is expected to have created additional revenue opportunities.
Meta Platforms’ expanding AI ecosystem, supported by Muse models and Meta AI, is expected to have strengthened user engagement and advertising effectiveness in the quarter to be reported. Growing adoption of AI creative tools, Meta Business Agents and subscription offerings is likely to have benefited the company’s top-line growth in the to-be-reported quarter.
However, rising infrastructure investments, AI-related spending and operating expenses are expected to have pressured third-quarter profitability. Higher depreciation, data center expenses and AI talent costs could constrain margins. Foreign currency headwinds and ongoing regulatory challenges are additional concerns.
META Shares Underperform Sector; Valuation Stretched
META shares have rallied 7.5% year to date (YTD), underperforming the Zacks Computer & Technology sector’s 15.8% gain.
However, META’s shares have outperformed its peers in the advertising space, which includes Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) , and Snap (SNAP - Free Report) . While Snap shares have plunged 24%, Alphabet and Amazon shares have gained 8.8% and 8.3%, respectively, in the year-to-date period.
META Stock Performance
Image Source: Zacks Investment Research
Meta Platforms’ current valuation is stretched, as suggested by the Value Score of D.
On a forward 12-month price/sales basis, META is trading at 6.1X, higher than the Zacks Internet Software industry’s 4.22X, Snap’s 1.41X and Amazon’s 2.91X, but lower than GOOGL’s 7.77X.
META Valuation
Image Source: Zacks Investment Research
META Leverages AI to Boost Growth, Higher Capex Hurts
META’s long-term growth prospects are supported by its expanding AI ecosystem, growing enterprise opportunities and investments in next-generation computing infrastructure. The company is investing in advanced AI capabilities through Meta Superintelligence Labs, focusing on developing increasingly sophisticated models that can power next-generation consumer and enterprise applications.
The company’s expanding enterprise AI initiatives are expected to drive long-term revenue growth. Meta Platforms is developing AI-powered coding and productivity tools, expanding its Muse Spark API offerings and exploring opportunities to monetize computing capacity directly. These initiatives are expected to diversify revenues beyond advertising and strengthen its presence in the rapidly growing enterprise AI market.
The company’s investments in custom silicon, data centers and network infrastructure are expected to strengthen its competitive position. Meta Platforms is prioritizing computing capacity expansion through 2027 while establishing infrastructure foundations to support growth in 2028 and beyond. Its strategic venture with BlackRock to develop a 1-gigawatt data center in Texas further supports these expansion plans.
However, elevated capital expenditures remain a major concern. Meta Platforms expects 2026 capital expenditures between $130 billion and $145 billion, reflecting aggressive investments in AI infrastructure, data centers and computing capacity. These investments are expected to increase depreciation, infrastructure operating costs and financial commitments, potentially pressuring margins and free cash flow.
Meta Platforms acknowledges that AI and Reality Labs investments are reducing cash flow, operating margins and profitability and expects spending to continue increasing. Reality Labs reduced 2025 operating profit by approximately $19.19 billion, and 2026 Reality Labs operating losses are expected to remain similar to 2025 levels.
Conclusion
Meta Platforms appears well-positioned heading into its third-quarter 2026 earnings release, supported by strong advertising demand, expanding AI capabilities and improving user engagement. However, elevated capital expenditures, margin pressure and premium valuation remain concerns. Meta Platforms’ third-quarter 2026 results and management’s commentary on AI spending, capital allocation and monetization progress will likely play a crucial role in determining the stock’s near-term direction.
Meta Platforms currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.