Meta raises low-end of 2026 capex outlook, announces Class C stock plan to preserve founder-led control

Overview

• Social media giant's Q3 revenue grew 26% yr/yr, beating analyst expectations

• Adjusted EPS for Q3 rose sharply, boosted by core business and excluding litigation charge

• Company approved new Class C common stock and a one-time stock dividend

Outlook

• Meta expects Q4 2026 revenue between $73 bln and $76 bln

• Meta raises low-end of 2026 capex outlook to $135 billion-$145 billion from $130 billion-$145 billion to incorporate ~$9.9 billion legal charge

• Meta expects 2026 Reality Labs losses to narrow to $18-19 bln

Result Drivers

• ADVERTISING GROWTH - Higher ad impressions and a 14% increase in average price per ad drove revenue growth

• AI INVESTMENTS - Co said AI investments boosted advertising revenue by improving engagement and monetization

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 56 "strong buy" or "buy", 6 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the online services peer group is "buy"

• Wall Street's median 12-month price target for Meta Platforms, Inc. is $815.00, about 17.4% above its October 20 closing price of $694.25

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 17 three months ago

Reuters Recommended Reads

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• Oct 19 - AI stocks bounce back after bruising selloff, CoreWeave gets Goldman upgrade

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)