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Meta Stock On Winning Streak With Earnings Due. This Number Takes 'Center Stage.'
  
Meta Platforms ( META) stock rose early Monday, setting up a seventh consecutive positive trading day. The Facebook and Instagram parent company reports third-quarter earnings late Wednesday.
Expectations are high following second-quarter results that one analyst said "blew the doors off." Analysts project Meta will post sales of $49.5 billion for the September-ended quarter, according to FactSet, representing 22% year-over-year growth.
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?Zuckerberg Is Investing Billions On AI. Why It's A Make-Or-Break Moment For Meta.
That's the highest growth target for Meta this year. For Meta's Q2 and Q1 results earlier this year, analysts were forecasting sales growth of 14% and 13%, respectively, ahead of the results. Meta beat both of those marks with 22% sales growth in Q2 and 16% in Q1.
Meanwhile, analysts expect the Facebook parent company to post an 11% increase in earnings to $6.72 per share, according to FactSet.
Nearly all of Meta's revenue comes from sales of digital ads on the company's Family of Apps, led by Facebook and Instagram. Stifel analyst Mark Kelley wrote to clients late last week that digital advertising is "generally in a good spot," with Meta remaining a top pick.
"Estimates seem reasonable, with our checks highlighting continued Instagram strength, though 2026 capex (and related expenses) likely takes center stage this quarter," Kelley wrote.
Meta Stock: Watching CapexMeta has historically given guidance for the next year's capital expenditures plan during its third quarter report, though the company skipped offering specific numbers in last year's Q3 earnings statement.
Analysts are currently forecasting Meta's capital expenditures will reach $96.97 billion in 2026, a 41% increase from the 2025 estimated total. Chief Executive Mark Zuckerberg has committed to spending hundreds of billions on data centers and other computing infrastructure to ensure Meta is a leader in artificial intelligence.
Jefferies analyst Brent Thill is forecasting Meta's 2025 capex will end at $72 billion, up 94% year over year, and capex of $103 billion for next year, he said in a client note Friday.
"We do not anticipate Meta pulling back significantly on its capex initiatives given the strategic importance of AI, ongoing notable hires, and the CEO's repeated commitment to invest hundreds of billions in AI," Thill wrote.
Kelley added in the Stifel client note that "investors have grown a bit more comfortable with elevated levels of capex near-term." So the risk of Meta stock taking a hit from higher-than-expected 2026 expense guidance is "reasonably limited," in his view.
Meta Vs OpenAI?Meta stock is ahead 28% year to date but remain below highs from early August.
The social media giant's shares were weighed down earlier this month by the rapid rise of OpenAI's Sora app for AI-generated video. Sora topped the list of most-downloaded apps on the Apple ( AAPL) store within days of its launch in late September.
Sora overshadowed Meta's similar Vibes AI-created video app and also marked the emergence of a potential rival to Meta's Facebook and Instagram.
Zuckerberg could face questions from analysts Wednesday about whether AI-generated video apps represent a competitive threat.
But could Sora actually be a good thing for Meta? One analyst made the case in a note this weekend.
Bernstein's Mark Shmulik said Sora ultimately allows more video creation, similar to how tools from TikTok and Instagram made it easier to splice together short videos. Sora adds another level, giving people the ability to use computer-generated images to create new types of video.
"Sora is a creator tool ... and what does a creator seek to do with their art?" Shmulik wrote. "They need distribution, and are there any better distribution channels around than Meta, TikTok, and YouTube? This influx of novel content broadens the library that these distribution platforms content recommendation algos can choose from to deepen user engagement and time spent."
Meta Stock Retakes 50-DayOn the stock market today, Meta stock is up nearly 2% at 751.98 in morning trading. That helped Meta shares climb back over the 50-day moving average.
The gains Monday add to a streak of positive trading for Meta stretching back to Friday, Oct. 17. Meta broke a negative trend line on its stock chart that began with a recent high of 790.90 on Sept. 19. Shares fell 12% from that level to reach a low of 690.51 on Oct. 6.
The recent action has Meta stock in a newly formed double-bottom base with a buy point at 790.80, according to IBD MarketSurge.
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