META
The setup
Meta is walking into its third-quarter report like a kid with a lemonade stand that somehow also needs a data-center budget. Shares barely budged Thursday, but investors are clearly glued to the same question: can the company keep pumping money into AI and infrastructure without blowing up margins?
Wall Street’s still in the camp
BNP Paribas analyst Nick Jones kept an Outperform rating on Meta and slapped on an $885 price target, which implies about 20% upside from the cited share price. In plain English: he thinks the market may be underestimating how much Meta can squeeze out of its giant social machine.
Jones expects:
- third-quarter revenue growth of 24% to 25% year over year
- GAAP diluted EPS above $3.60
- fourth-quarter revenue guidance of $73 billion to $76 billion
That’s a tall order, but Meta has the kind of user engagement most companies would trade a limb for. The analyst says the company still captures more than 40% of the time people spend across major social platforms. That’s not just a metric — that’s a moat with a moat.
The catch: AI doesn’t come cheap
Here’s the awkward part. Jones also expects Meta to raise its 2026 capex outlook by $5 billion to $10 billion, on top of an already hefty $130 billion to $145 billion range. So yes, the AI story is alive. But so is the bill.
What matters for investors is whether Meta can keep converting that spend into:
- better ad targeting
- more monetization from AI tools
- subscription and enterprise revenue
- enough growth to justify the pile of cash going out the door
Big picture
Meta isn’t being priced like a sleepy social app anymore; it’s being treated like an AI infrastructure-and-advertising hybrid with a massive audience attached. If it nails the numbers and guides well on Oct. 28, 2026, the market may keep rewarding the spend. If not, the “AI moat” starts looking a lot more like an expensive swimming pool.