Meta's Q3 Earnings Call: Our Top 5 Analyst Questions

Meta’s third quarter results for 2025 sparked a negative market reaction, driven by an unusually large shortfall in GAAP earnings despite robust revenue growth. Management attributed the strong top-line performance to continued advances in AI-powered ad targeting, increased engagement across its family of apps, and substantial growth in video content consumption. However, higher expenses related to technical hiring, infrastructure expansion, and legal matters weighed heavily on profitability. CFO Susan Li acknowledged, “Year-over-year expense growth accelerated 20 percentage points from Q2 primarily due to legal-related expenses, increased AI talent acquisition, and infrastructure costs.”

Is now the time to buy META? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Meta’s Q3 Earnings Call

• Brian Nowak (Morgan Stanley) asked about the return on increased capital expenditures for AI and signals of improved ad performance. CFO Susan Li pointed to strong growth in value-weighted conversions and ongoing improvements from new AI model architectures as evidence of ROI.
• Douglas Anmuth (JPMorgan) questioned the balance between CapEx growth and its impact on earnings and free cash flow. Li replied that budgeting is ongoing, with compute capacity as the top priority, while CEO Mark Zuckerberg added that demand for compute consistently exceeds supply, justifying further investment.
• Eric Sheridan (Goldman Sachs) sought insights on Meta AI user behavior and how improved AI models could shape future products. Zuckerberg noted more than 1 billion monthly users and said superior AI models would unlock large-scale adoption and new product categories.
• Justin Post (Bank of America) asked about the margin outlook for new AI-driven products. Zuckerberg said it is too early to predict margins, emphasizing a focus on maximizing user value and long-term profitability rather than margin percentages.
• Youssef Squali (Truist Securities) asked about the profitability path for wearables and the strategic use of off-balance sheet financing for AI infrastructure. Zuckerberg sees wearables’ profitability tied to both device sales and AI services, while Li outlined new financing partnerships to support future capacity.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will watch (1) the pace of AI infrastructure expansion and its impact on core ad business performance, (2) adoption and monetization of new AI-powered products like Vibes and Meta AI enhancements, and (3) regulatory developments in the EU and U.S. that could affect ad targeting and revenue streams. Execution on cost control and progress toward scaling next-generation AI models will also be key signposts for sustained growth.

Meta currently trades at $622.97, down from $752 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

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