Meta Q3 earnings updates: Investors want updates on AI and capex, with the stock up 27% in 2025

Meta CEO Mark Zuckerberg speaks at the 2025 Meta Connect conference in Menlo Park, California, on September 17, 2025.

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It’s earnings day for Meta.

The social media giant is one of “hyperscalers” at the heart of Wall Street’s AI trade, and updates on its AI ambitions will likely be the highlight of its third-quarter report after the bell on Wednesday.

Wall Street expects revenue of $49.5 billion, and investors will be waiting to hear more on its plans for capex and how it will monetize AI. Meta recently invested $14 billion in Scale AI with the goal of reaching AI “superintelligence.”

Overall, Wall Street analysts remain bullish on the social media company, looking for positive updates on the trajectory of AI, but also ad spend, Instagram Reels, and devices.

Meta’s earnings will be released shortly after the closing bell, with the analyst call scheduled for 4:30 p.m. ET.

Meta and OpenAI’s rival AI feeds

In September, Meta released its new short-form AI video feed, Vibes. Some tech founders and execs quickly roasted it as “AI slop.” Days later, OpenAI released its new video generation model, Sora 2. Its own short-form Sora app quickly topped the App Store charts.

OpenAI has said that 1 million people downloaded the Sora app within five days, while Similarweb data indicates that the Meta AI app’s downloads surged by 100,000 after the Vibes feed launched. We might get some further data points on Vibes engagement among Meta’s users on the earnings call.

Meta’s changing head count

Illustration of Meta, Instagram and Facebook logos — The Meta employee made the comments in a Blind post on Wednesday

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Meta has faced some dramatic changes to its headcount in the past few months. After doling out big contracts to staff up its superintelligence unit, Meta cut 600 jobs from it. Meta also cut staff in its risk division as the company automated its review process, per a memo viewed by Business Insider.

These cuts come after January’s broader layoffs, when Meta cut 5% of its workforce — roughly 3,600 employees — that the company labeled “low performers.”

It’ll be interesting to see if Zuckerberg or CFO Susan Li talks about plans for future head count growth — or if they anticipate head count to remain flat or decrease in the coming quarters.

Keep track: How many times AI is mentioned vs. the metaverse

When Facebook rebranded to Meta in 2021, Zuckerberg declared a “very long-term bet” on the metaverse. The company then spent billions on projects like Horizon. The fervor has since quieted, though the company announced a new AI feature to build 3D worlds with text at its September Meta Connect event.

On Monday, Meta CTO Andrew Bosworth told employees the company was reshuffling its metaverse unit in a memo viewed by Business Insider. “The priority of the metaverse work remains unchanged, and it continues to be a companywide priority,” he wrote.

Listen for any changes to the AI capex number for 2025

Mark Zuckerberg said Meta could spend up to $72 billion this year on AI infrastructure. Will Zuck raise that number even higher? It’s possible, but if all this AI capex spend is really hurting Meta’s free cash flow and margins, investors might start feeling uneasy.

That’s why they’ll be laser-focused on Meta’s advertising business, which still makes up most of the company’s earnings. If ad numbers are healthy — and right now, expectations from Wall Street are high — then Zuck probably has more runway for his AI bets.

DA Davidson is eyeing comparisons with Alphabet

Tech analysts at DA Davidson wrote ahead of Meta’s earnings that they’re watching for how Meta does compared to its Magnificent Seven peer Alphabet, which also reports results on Wednesday.

“We expect META to continue outgrowing Google’s ad revenue, though growth may decelerate on tougher comps (including elections),” the firm said in a client note. “We do not expect growth at Google to decelerate significantly, though we are monitoring OpenAI closely, as we believe the likely introduction of advertising around ChatGPT may create a headwind for Google Search advertising growth.”

DA Davidson has an $825 price target and a “Buy” rating on Meta stock.

CFRA sees Meta meeting high expectations, thinks capex will remain lofty

A visitor stands by a sign posted in front of Meta headquarters on January 29, 2025 in Menlo Park, California.

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CFRA analysts think Meta earnings will deliver.

“Ahead of Q3 2025 results on October 29, we believe consensus views are well aligned with reality, as META’s AI investments allow it to outpace the broader digital ad market,” CFRA said in a note. “We currently see META posting a growth pace of about 21%-22% in Q3.”

Expect Meta’s AI spending plans to stay elevated, in the $66-72 billion range for 2025, the firm said.

CFRA rates the stock a “Buy” and has an $880 price target for the stock, representing potential upside of 16%.

Meta is a top pick for JPMorgan, with analysts bullish on AI strategy and superintelligence

JPMorgan’s Doug Annuth wrote that he’s bullish on the social media company’s AI push ahead of earnings. After a big round of layoffs in Meta’s AI unit, there’s a lot of anticipation for updates on the superintelligence strategy.

“We’re bullish on AI Ad improvements, Reels, & Video. META continues to execute well across its AI strategy & push toward personal superintelligence prioritizing ads, engagement, business messaging, Meta AI, & AI Devices.”

The bank has an $875 price target on the stock, implying 15% upside.

BofA says AI outlook will be ‘critical’ for sentiment

A woman wears the Meta Quest 3 headset — A woman wears the Meta Quest 3, the standalone mixed-reality headset, on March 5, 2025.

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Bank of America analysts say they’re watching what Meta says about AI, and that a disappointing update on monetization or future ambitions could sour investor sentiment.

They also said that they’ll be looking at comparisons with Alphabet, which also reports results on Wednesday.

“Meta will report concurrently with Alphabet & we think investors will focus on revenue growth differentials & relative margin performance,” Bank of America analysts wrote.

The bank continued: “Meta should compare well, we expect 23% y/y growth vs 13% for Google properties in 3Q, with Meta possibly accelerating on AI driven improvements in targeting, deeper CRM integrations, video model unification & growing advertiser adoption of Gen-AI-powered creative tools.”

The bank has a $900 price target on Meta stock, a 19% increase from current levels.

Wall Street is predicting Q3 revenue of $49.5 billion and EPS of $6.72

THIRD QUARTER

Revenue estimate $49.57 billion
Advertising rev. estimate $48.57 billion
Family of Apps revenue estimate $49.02 billion
Reality Labs revenue estimate $317 million
Other revenue estimate $597 million
Operating income estimate $19.47 billion
Family of Apps operating income estimate $24.77 billion
Reality Labs operating loss estimate $5.18 billion
Operating margin estimate 39.3%
EPS estimate $6.72
Ad impressions estimate +10.8%
Average price per ad estimate +10.5%
Average Family service users per day estimate 3.48 billion
FOURTH QUARTER
Revenue estimate $57.35 billion
Capital expenditure estimate $21.13 billion
YEAR
Total expenses estimate $115.63 billion
Capital expenditure estimate $69.29 billion

Source: Bloomberg

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