Meta Platforms faces investor scrutiny over AI spending ahead of earnings

Meta Platforms is set to report third-quarter earnings on October 21, facing intense scrutiny over its massive investments in artificial intelligence. Investors are closely monitoring whether the company's significant capital expenditures can translate into increased profitability and advertising revenue. Meta has projected capital expenditures between $130 billion and $145 billion for 2026 to support AI infrastructure, including data centers and networking equipment.

Analysts anticipate third-quarter revenue of approximately $63.3 billion. While Meta has shown strong advertising growth, with second-quarter revenue up 28% year-over-year, rising operating expenses and infrastructure costs have previously caused market volatility. Options markets are currently pricing in a potential 6% swing in Meta's share price following the announcement.

In anticipation of the results, Truist Securities raised its price target for Meta to $1,000 from $763, maintaining a Buy rating. Market observers note that the upcoming report is a critical test for the broader technology sector, as the ability of large-cap AI spenders to deliver returns remains a central concern for investors.