Meta earnings live updates: AI spending, ad revenue and stock reaction

Meta is set to release its third-quarter earnings after the market close on Wednesday, with investors eagerly awaiting evidence that the company's recent artificial intelligence (AI) initiatives will drive future sales growth. Analysts polled by LSEG anticipate that Meta's latest AI efforts, such as its Muse AI personal assistant tool launched in September, have played a role in the firm's stellar September performance on Wall Street since 2022.

The company's extensive portfolio, encompassing Facebook and Instagram, has broadened the reach of AI agents to the general public. Additionally, Meta's rapid development of new foundation models, such as Muse Wonder, has been a key focus for Wall Street.

One aspect analysts will closely monitor is Meta's projected increase in data center-related capital expenditures (capex) to support the development of AI agents and foundation models. In July, Meta narrowed its 2026 capex guidance to between $130 billion and $145 billion, a $5 billion increase from its previous range. In light of this, analysts predict Meta's capex for 2027 will reach $196.3 billion, according to FactSet.

Meanwhile, Meta's daily active people (DAP) for the period are expected to remain steady at 3.65 billion, nearly unchanged from the previous quarter. This metric encompasses all users across Meta's ecosystem of apps, such as Facebook and Instagram.

Meta is poised to be the first major tech company to disclose quarterly financials during this earnings season, with Alphabet, Microsoft, and Amazon set to report their results in the coming week. Together, these four companies have collectively pledged over $730 billion in capex this year, as they invest in graphics processing units (GPUs) and AI infrastructure to build expansive data centers worldwide.

FactSet analysts forecast that this spending will swell to approximately $1 trillion in the following year, led by Alphabet's projected expenditure of over $310 billion.

However, Meta's recent quarter was not entirely smooth sailing. In August, the social media giant reached a settlement of nearly $17 billion to resolve a major lawsuit filed by a coalition of state attorneys general, including California's Rob Bonta. The case centered on allegations that Meta had misled the public about the extent of adverse mental health effects caused by design elements like recommendation algorithms within apps such as Facebook and Instagram.

This $10 billion legal charge, coupled with ongoing personal injury claims and a separate federal suit involving school districts, could potentially impact Meta's third-quarter earnings per share.