Meta Q3 Earnings: Can Meta Justify Its Massive AI Bet?

Meta Q3 Earnings: Can Meta Justify Its Massive AI Bets?

Meta Q3 EPS Preview

Zacks Rank #2 (Buy) Meta Platforms (META) will report third-quarter 2025 earnings results after the US equity market close on Wednesday, October 29, 2025.

META Stock Performance and Expected Move

Year-to-date META shares are performing broadly in line with the Nasdaq 100 Index, gaining ~26% thus far in 2025. However, META shares are up nearly 200% over the past five years.

Meanwhile, the options market is implying a post-earnings move of +/- 7.1%. Over the past four quarters, the average post-earnings move for META has been 5.28%.

META Analyst Expectations & EPS Surprise History

Zacks Consensus Analyst Expectations anticipate that Meta will earn revenue of $49.45B in Q3 and EPS of 6.61, resulting in year-over-year EPS growth of 9.62%.

Ahead of earnings, Wall Street analysts are very bullish on the stock. META earns a Zacks Rank #2 (Buy), and several analysts have revised their earnings expectations higher over the past two months.

Meanwhile, META has a tremendous track record of outperforming Wall Street expectations, beating estimates in eleven consecutive quarters.

Over the past four quarters, META has beaten analyst expectations by a healthy 20.47%.

Meta Platforms: Will the Massive AI Investments Pay off?

Meta Platforms is the world’s largest social media platform. The company has evolved from its initial Facebook platform into a diversified social media juggernaut through its bold acquisitions of leading social platforms, including the Instagram photo and video app and the WhatsApp messaging app. At the direction of its iconic CEO and founder, Mark Zuckerberg, Meta Platforms is making its boldest bet yet – AI. Meta is expected to spend ~$70 billion of capital expenditure (CAPEX) this year. By next year, that number is expected to balloon to $100 billion as META continues its aggressive investment spree on AI infrastructure, data centers, and compute. The biggest question ahead of Q3 earnings is whether these AI investments will pay off.

Below are three key drivers to watch:

·      META Advertising Revenue: Advertising revenue comprises the lion’s share of Meta’s earnings. For that reason, this is the most critical number for investors to watch.

·      CAPEX Spend: Meta is likely to continue its CAPEX spending spree. However, investors will want to see that Zuckerberg and his team can communicate that these investments are bearing fruit and are not negatively impacting free cash flow and margins.

·      AI Impact on User Engagement: In recent quarters, Meta’s AI integration efforts have improved engagement and revenue across its platforms and particularly with its short-term video offering, ‘Instagram Reels’. Investors will want to see those trends continue.

Bottom Line

Meta Platforms’ earnings report is a critical event to watch not just for investors but for the market in general. Wednesday’s earnings report should provide clues about how much AI can drive growth.

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This article originally published on Zacks Investment Research (zacks.com).

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