Copyright Barchart
Over the past year, mega-cap tech stocks have been the heartbeat of Wall Street’s rally, and few have outperformed like Meta Platforms (META). Once written off during its costly metaverse pivot, Meta has re-emerged as an AI-driven powerhouse, dominating digital advertising while integrating artificial intelligence (AI) across all its platforms. With shares up about 28% in 2025, investor enthusiasm is high, and the next major catalyst is just days away. Meta will report its third-quarter 2025 earnings after the market close on Wednesday, Oct. 29, a release that could shape sentiment across the entire tech sector. Following July’s blowout quarter, expectations are lofty. For Meta fans and growth investors alike, this is one earnings date worth circling on the calendar. About Meta Stock Founded in 2004 by Mark Zuckerberg, Meta Platforms is the parent of Facebook, Instagram, WhatsApp, and other social apps. A tech pioneer, Meta connects billions worldwide and is rapidly deploying artificial intelligence across its services. Meta now has a $1.9 trillion market cap. The company is also building “metaverse” hardware (virtual/augmented reality devices) under its Reality Labs division. META stock has outperformed the broader market, with a one-year price performance of 28%, significantly higher than the sector median of 2%. This gain reflects a rebound from spring lows and strong quarterly results. Analysts have pointed to accelerating ad revenue growth, boosted by AI-driven ad delivery, as a key catalyst. Meta has outpaced the broader market, gaining about 28% over the past year, well above the S&P 500 Index ($SPX), which has roughly a 17% increase. The stock’s advance marks a recovery from spring lows, supported by steady quarterly results. Analysts say improving ad revenue trends, aided by AI-enhanced ad targeting and delivery, have been a key driver of the rebound. Meta is not obviously cheap. Its forward P/E is about 26x, above the 21x median for the sector. In other words, Meta’s earnings multiple is higher than the typical tech company’s, suggesting it trades at a premium by that measure. At the same time, Meta’s valuation is below that of some peers; for example, Apple (AAPL) and Netflix (NFLX) have higher P/E ratios, so opinions vary. Overall, its metrics suggest Meta is at least fairly valued or rich relative to sector norms, but it is not a clear bargain. What to Expect From Upcoming Earnings Report META stock has been riding the momentum from recent quarters. In Q2, the company handily beat targets with 22% revenue growth and generous guidance, which reinforced optimism. Management’s guidance for Q3 sales of $47.5 to 50.5 billion and a narrowing of expense guidance to $114 to $118 billion full-year signaled confidence. In the broader market, investors see Meta benefiting from high digital ad budgets and its renewed focus on AI. The company has boosted its infrastructure spending capex guidance from $66 to $72 billion for 2025 to support AI, which could pressure expenses but also lay the groundwork for future growth. In the quarters ahead, analysts expect Meta’s advertising business to remain strong. Consensus projects Q3 ad revenue up 21.6% year-over-year (YoY). With global ad spending rising 7% in 2025, Meta (alongside Alphabet (GOOG) (GOOGL) and Amazon (AMZN)) is capturing much of that growth. Analysts note that Meta’s “increasing ad impressions” and AI-driven feed improvements have kept users engaged across Facebook, Instagram, WhatsApp, and Threads. On the flip side, Meta’s heavy Reality Labs losses and higher infrastructure costs are risks. Investors will watch if Meta’s ad growth slows in Q4, as hinted at (after tough comparables), and whether the huge capital spending dampens margins. Overall, market watchers expect strong topline growth but will scrutinize profitability and guidance. According to Barchart data, the consensus forecast is roughly 22% revenue growth to $49.55 billion and adjusted EPS of about $6.61 for Q3. With Meta having beaten estimates in every quarter the past two years, even a small miss could be notable. Recent News and Developments Meta has been active with product and organizational news lately. On Oct. 27, Meta rolled out a new “ghost posts” feature in Threads (posts that auto-archive in 24 hours) to boost engagement. In leadership moves, CEO Zuckerberg appointed Instagram veteran Vishal Shah to lead AI product development, underscoring Meta’s focus on AI. Simultaneously, Meta announced it will cut 600 jobs in its Superintelligence Labs, aiming to make its AI unit more flexible. On the regulatory front, the EU’s Digital Services Act has targeted Meta. Preliminary findings say Facebook and Instagram lack adequate transparency and content-flagging processes. Meta disputes this, but the inquiry could ultimately result in fines if changes aren’t made. Analysts’ Views and Price Targets Wall Street remains generally bullish on META stock. Morgan Stanley recently raised its price target to $850 from $750 and maintained an “Overweight” rating. MS analysts cited Meta’s strong Q2 results and AI-driven improvements and noted they lifted their 2025–26 revenue and EPS estimates. Similarly, Goldman Sachs boosted its target to $870 and kept a “Buy” rating, arguing that continued growth in advertising and improved cost efficiency justify a higher valuation. Bank of America Securities reiterated its “Buy” stance with a $900 target, highlighting potential revenue upside from a better macro environment and AI tailwinds. Most analysts see the stock as underpriced given Meta’s growth prospects, even as some caution on higher spending. Wall Street's consensus is “Strong Buy,” with the average 12-month price target around $870, roughly 16% above current levels, implying moderate upside potential.
