Meta Platforms is set to release its third-quarter results after Wednesday's closing bell. Here's what you need to know.
NET INCOME: The company is expected to report a profit of $17.22 billion, or $6.64 a share, according to analysts polled by FactSet. That compares with a profit of $2.71 billion, or $1.05 a share, a year earlier.
REVENUE: Revenue is expected to rise to $63.34 billion, up from $51.24 billion last year.
Meta shares were recently down 2.2% at $690.16. The stock is up 4.6% year-to-date.
WHAT TO WATCH
-- It's been a big quarter for Meta's artificial-intelligence work. Investors for months had been debating whether the billions of dollars CEO Mark Zuckerberg put toward AI infrastructure and talent, including hiring the Scale AI co-founder Alexandr Wang as chief AI officer, would be worth it. Now, Meta has released an AI personal assistant called Muse, whose app quickly skyrocketed to the top of the Apple U.S. App Store, along with proprietary AI models the company said can compete with leading models from OpenAI, Anthropic, and Google. Once seen as an AI laggard, Meta's AI initiatives are being taken more seriously than ever. "The narrative around its AI positioning has improved materially," Truist analysts wrote in a recent note. "We see Meta as an AI winner long-term."
-- Still, the debate over AI at Meta is far from settled. Though Muse's downloads have been strong, the daily active users and retention metrics don't yet compare favorably to Instagram or Facebook, according to Morgan Stanley analysts, who added that Meta will need to keep a fast pace of product innovation to drive retention. "We have seen META launch products before that didn't live up to expectations (FB Shopping, the Metaverse, MetaAI, etc) and think the market will need signal on adoption and monetizable behavior to re-rate shares," Morgan Stanley analysts wrote in a note shortly after the release of Muse.
-- The AI movement also has implications for capital spending on compute, both to power inference for Muse agentic workloads and Meta's frontier models, and to train next-generation versions of each. "With revenue growth likely at the high-end of expectations and early green shoots from Muse emerging (in terms of user growth and engagement), we believe Meta will again signal its intent to continue to lean aggressively into its infrastructure build out and mtg spend next year," Truist analysts wrote in a recent note.
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