Key insights
- Meta Platforms is expected to report earnings, with traders anticipating a significant stock movement of up to 6% in either direction. Analysts are largely bullish, with a mean target price suggesting nearly 25% upside. Positive results from AI initiatives like Muse could improve sentiment and demonstrate returns on AI investments, potentially impacting the broader AI trade.
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Meta Platforms is set to report earnings after the closing bell Wednesday, with traders looking for a sizable move in the social media giant’s stock.1
Based on current options pricing, Meta (META) shares are seen swinging up to 6% in either direction by the end of the week. A move of that size from Friday’s close could lift the Facebook and Instagram parent’s stock as high as $754, or drag it below $660.
Meta shares rallied last month on optimism around early signs of success with the company’s Muse AI agent, but have pulled back recently amid broader worries about AI spending, leaving them up 7% for the year.
Proof of Meta’s progress monetizing its AI efforts could help improve sentiment around the stock and the broader AI trade.
In a note to clients Friday, Deutsche Bank analysts wrote they believe Muse and other recent AI-related launches put Meta “at the start of a rich product cycle” that could foreshadow the company’s potential returns from its investments in AI.2
Analysts expect Meta to report third-quarter revenue of $63.31 billion, growth of about 24% year-over-year. Earnings per share are expected to come in at $5.60, well above last year’s $1.05, when Meta’s net profits were negatively impacted by a big tax bill.
Analysts are overwhelmingly bullish on Meta shares heading into Wednesday’s report, with 18 of the 19 analysts tracked by Visible Alpha recommending buying the stock, and one neutral rating. Their mean target is $878, suggesting upside of nearly 25% from Friday’s close.