META: Meta Stock Drops Ahead of Key Earnings. What Traders Will Be Watching.

Shares missed Monday’s tech rebound ahead of Wednesday’s results.

📉 Meta sits out the technology recovery

• Meta stock META fell 0.6% to $705.44 Monday, extending its decline to four consecutive sessions even as the Nasdaq Composite gained 1.1%.
• That divergence puts additional pressure on the company’s earnings to restore confidence in the growth and investment outlook.
• Third-quarter results arrive Wednesday after the close, with management’s call at 4:30 p.m. ET. Analysts expect $63.3 billion in revenue, representing growth of around 24%. The important follow-through will be how much of that growth reaches operating profit and cash flow.
• Morgan Stanley offered a more optimistic assessment, raising its price target to $820 from $775 while maintaining Overweight. Its thesis combines better advertising returns with potential revenue from Muse and business AI subscriptions.

🤖 Muse expands beyond the personal assistant

• Meta introduced Muse Wonder and Muse Wonder Full on October 12, describing them as its most capable models for personal and professional tasks.
• The timing is key: Wonder launched after the third quarter ended. Wednesday’s reported revenue cannot capture its subsequent commercial performance. Management’s commentary on adoption, subscriptions and the fourth-quarter outlook will be especially useful.
• The wider strategy includes Muse Charm, a pocket-sized voice device, and integration with AI glasses.

💰 Advertising has to support the investment

• Meta’s existing 2026 capital-spending guidance is $130 billion to $145 billion, including finance-lease principal payments. Watch whether that range holds and what management signals for 2027.
• Spending on servers and data centers builds capacity, while depreciation and operating expenses continue affecting earnings after the initial purchases.
• Last quarter’s advertising generated $59.4 billion of Meta’s $60.8 billion quarterly revenue, making it the business that currently finances the expansion.
• Perhaps the most useful combination would be resilient advertising, clearer Muse monetization and spending supported by improving cash flow.