Meta: up 23% since late August, results on Wednesday, and why puts don't work at this share price
Meta closed at $709.33 on 16 Oct, up 23% from $576.14 on 27 Aug and 8.8% below its 24 Sep peak of $777.59. Q3 results come out Wednesday 21 Oct after the close, confirmed by the company.
The move started with Muse, Meta's personal AI agent, which has a free tier and paid plans at $20 and $100 a month. It hit a record 264,000 US downloads on 19 Sep. On 21 Sep the stock jumped 11.4% on about 2.6× normal volume, after Wells Fargo raised its target to $796 from $640. On 16 Oct it fell 3.7% with the rest of mega-cap tech on inflation and AI-financing worries.
The business is strong, but spending is absorbing the growth. Q2 revenue was $60.8B, up 28%, with ad impressions up 14% and price per ad up 12%. Operating margin fell from 43% to 31% as R&D rose 67%. Q2 capex was $31.1B against $31.9B of operating cash flow, so free cash flow was only $0.8B, and the buyback was paused in the first half. Consensus for 2026 is revenue +26% but EPS of only +2%.
What I'll check on Wednesday, in order:
2027 capex. If it's above about $180B, free cash flow stays near zero through 2027.
Q4 revenue guidance against growth of about 20%.
Any first Muse subscription revenue.
Operating margin and the Reality Labs loss.
Whether buybacks have resumed.
My scorecard gives it 69/100, level with Alphabet and Amazon. They're one AI-capex trade in three wrappers, so I count them together.
My sell-put gates at $709.33:
Zone: Full Green, 12.2% above the 200-day SMA ($631.98).
20 EMA (≈$719.3): fail, price is below a falling EMA.
IVR 64.7, IVP 86.9: pass, but all of it is earnings premium that will collapse after Wednesday.
Earnings: fail. The 20 Nov monthly is out of band.
Sizing: fail. A 10%-OTM strike (~$635) ties up $63,500, 2.5× my single-name cap.
No strike my rules accept fits at any legal size, so I own Meta as stock, not through puts.
Personal framework, not investment advice.
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