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The Tradr 2X Short META Daily ETF (BATS:METQ) is drawing attention among the day’s top-performing ETFs as Meta Platforms Inc. (NASDAQ:META) shares face pressure following the social media giant’s latest earnings report and fresh legal troubles.

• Meta Platforms stock is taking a hit today. Why is META stock falling?

Meta shares fell more than 6% on Thursday after investors weighed stronger-than-expected revenue against rising artificial intelligence spending, a multibillion-dollar legal charge and a new $25 billion penalty in a data-privacy case. The stock had initially gained following the company’s third-quarter results. Reuters reported that the market was reassessing the cost of Meta’s AI ambitions despite progress in its business.

Why Meta Stock Is Under PressureMeta reported third-quarter revenue of $64.60 billion, up 26% year over year and ahead of analysts’ expectations. It also forecast fourth-quarter revenue of $73 billion to $76 billion, above the consensus estimate of $73.57 billion.

However, profitability and cash generation presented a more complicated picture.

The company recorded a $9.89 billion legal charge tied to its settlement with 52 state attorneys general over teen mental health litigation. Operating income fell 37% to $12.99 billion, while free cash flow turned negative at $2.12 billion.

Meta also raised its full-year capital expenditure outlook to $135 billion to $145 billion as it continues investing aggressively in AI infrastructure. Investors must weigh whether future AI-driven advertising growth and new products will generate sufficient returns to justify the spending.

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Adding to the legal overhang, a New Mexico judge ordered Meta to pay $25 billion in a separate data-privacy case linked to allegations that the company misled users about its privacy practices.

How METQ Benefits From a Meta Sell-OffMETQ is designed to deliver 200% of the inverse of Meta stock’s daily performance, before fees and expenses. In practical terms, if META falls 1% over a trading day, METQ targets a gain of approximately 2%. If META rises 1%, the fund targets a loss of approximately 2%.

That makes the ETF a potential instrument for traders seeking short-term bearish exposure to Meta without directly shorting its shares. The fund resets its exposure daily, meaning its returns over multiple sessions can differ substantially from twice the inverse of META’s cumulative return.

For example, a 5% decline in META would imply a roughly 10% gain for METQ over that same day, assuming the fund meets its daily objective. Actual returns can differ because of expenses, market movements and tracking effects.

Price AnalysisMETQ ETF shares were up 13.72% at $16.98 at the time of publication on Thursday, according to Benzinga Pro data. This notable increase indicates a strong bullish sentiment among traders, likely driven by recent volatility in the underlying Meta stock, which has been subject to significant market fluctuations.

The current price is positioned 6% below the key technical levels, suggesting that there is potential resistance around the $18 mark. This level has historically served as a psychological barrier, and breaking above it could signal a shift in momentum for METQ.

Trading volume on Thursday reached 1 million shares, reflecting heightened interest and activity in the ETF.

What Traders Should Watch NextThe immediate question is whether Meta’s post-earnings weakness persists or whether investors refocus on accelerating advertising revenue and the company’s AI initiatives, including its Muse products.

METQ’s performance will depend primarily on Meta’s daily share-price moves, rather than on whether the company’s long-term business outlook is improving or deteriorating. A rebound in Meta shares could quickly reverse gains in the inverse ETF.

The fund is therefore best understood as a high-risk, short-term trading vehicle rather than a straightforward way to express a long-term view on Meta. Its daily leverage can amplify losses as well as gains, and volatility can erode returns over longer holding periods.

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Shares of Meta Platforms (META -7.26%) stumbled out of the gate on Thursday, falling as much as 7.6%. As of 1:10 p.m. ET, the stock was still down 7.2%.

The catalysts that sent the social media and artificial intelligence (AI) company lower were its financial results and a change to its stock structure.

Image source: The Motley Fool.

The good newsFor the third quarter, Meta generated revenue that grew 26% to $64.6 billion, driven by robust advertising. This drove diluted earnings per share (EPS) of $3.83, up 265%. However, the company took a $9.9 billion charge related to its recent legal settlement regarding teen social media addiction. Excluding this charge, EPS would have been $7.40.

For context, analysts' consensus estimates called for revenue of $63.4 billion and EPS of $5.46, so if not for the charge, Meta would have easily surpassed expectations.

Other metrics were equally robust. The company's daily active users rose 3% year over year to 3.64 billion, while ad impressions and average price per ad increased 10% and 14%, respectively.

$646.91-$50.61 (-7.26%)

NASDAQ · As of 1:33 PM ET 10/22/26

The not-so-good newsHowever, a change to Meta's stock structure was the headline. The company announced that its board of directors had established a new class of common stock -- non-voting Class C shares -- which will be effective Jan. 19, 2027. The company created this new class of shares to raise capital for its rising AI expenses, employee compensation, and potential acquisitions.

Meta will also use this new class of shares to effect a 2-for-1 stock split early next year, though the timing is still up in the air. The use of non-voting stock allows CEO Mark Zuckerberg to retain control of the company with a more than 60% voting interest thanks to his ownership of Class B shares, which carry 10 votes each, while regular Class A shares carry one vote each.

In other bad news, New Mexico hit Meta with a record $25 billion judgment for failing to protect user privacy in connection with the 2018 Cambridge Analytica scandal. Meta has said it will appeal.

At 22 times earnings, Meta is well below its 3-year average multiple of 27. While the stock is certainly cheap, investors should consider the risk associated with its legal exposure.

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Mark Zuckerberg is the founder and CEO of Meta. Bloomberg/Getty Images Meta stockholders are set to receive free shares if Mark Zuckerberg absolutely crushes it as CEO.

The social-media giant revealed in a Wednesday filing that if its upcoming Class C shares double from a baseline price of $580.60 to just over $1,161, and their compound annualized return since September 10 has been at least 10%, shareholders will receive a dividend: a Class C share for every Meta share they own.

If Meta stock — specifically its 30-day volume-weighted average price — doubles again to around $2,322, and has risen by at least 10% on average per year, shareholders will receive the same dividend again, and so on.

Meta, which owns Facebook, WhatsApp, Instagram, and the AI agent Muse, acknowledged how difficult it will be to unlock those dividends, describing the stock price targets as "extraordinary" in its filing.

Its stock has already surged more than sevenfold from its November 2022 low, giving Meta a nearly $1.8 trillion market capitalization that ranks it among the 10 most valuable companies in the world.

Will Newsmax's multibillion-dollar stock surge last?

The additional dividends would be paid on top of the initial dividend declared by Meta's board on Wednesday, which will see Class A and Class B shareholders receive Class C shares on a 1:1 basis, likely in late January.

Meta is rejigging its share structure in response to Zuckerberg's concerns about California's so-called billionaire tax: a one-off, 5% wealth tax on the roughly 250 billionaires living in the state.

Zuckerberg, who ranked fifth on the Bloomberg Billionaires Index with a $247 billion net worth at Wednesday's close, will be able to sell the Class C shares to access the liquidity needed to pay the tax, avoiding a sale of his existing shares that would erode his voting power.

Meta's board took action after Zuckerberg said he was considering moving out of California because of the potential tax, and cautioned that the steps involved in relocating, such as listing his home for sale, could spark questions from employees about the company's management, the filing says.

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Theron Mohamed You're currently following this author! Click to unsubscribe from email alerts.

Theron Mohamed is a London-based correspondent on the International team at Business Insider. His coverage spans finance, investing, wealth, markets, and the economy.Theron joined BI in 2019 as a reporter at Markets Insider and rose to the rank of correspondent before moving to the Trending team then the broader International team. He previously covered tech, media, and telecom stocks for Investors Chronicle magazine and had a brief stint on the Financial Times' Data team. He interned at the Wall Street Journal in New York where he primarily wrote for Heard on the Street.Theron has freelanced for The Independent, The Telegraph, WIRED, and several smaller publications. He holds an undergraduate degree in geography from the London School of Economics, and a master's degree in journalism from Columbia University.Theron often covers Warren Buffett, Michael Burry, and other elite investors. He also writes about the world's wealthiest people and shares financial advice from all manner of rich and successful people.Email Theron at [email protected] and follow him on X @theron_mohamed.

Tech Mark Zuckerberg Meta More Stocks Wealth Investing Billionaires California stock price AI Social Media

Meta Platforms Inc. (NASDAQ:META) plans to create a new class of non-voting shares it can use to raise capital, pay employees and buy other companies as it pours money into AI. A close read of the company's filing, however, turns up two drawbacks.

The cost of insuring ​Meta Platforms' (META.O) debt ‌against default hit an all-time ​high on ​Monday, as investors ⁠grappled with ​concerns about the ​cost of its expanding AI build-out.

Five-year credit ​default swaps ​gained 7.3 basis points ‌to ⁠a record high of 114.5 bps and ​were ​set ⁠for its biggest one-day ​jump since ​at ⁠least 2025, Markit data showed.

A New Mexico judge just handed Meta a penalty that dwarfs the FTC's landmark 2019 fine, and the ruling names Zuckerberg and Sandberg personally while targeting conduct the judge called central to Facebook's entire business model.

On Wednesday, October 21, 2026, Judge Francis Mathew of New Mexico’s First Judicial District in Santa Fe ordered Meta Platforms (NASDAQ:META | META Price Prediction) to pay the state $25 billion for misleading Facebook users about their privacy in the Cambridge Analytica case. The order is far larger than the $5 billion fine the Federal Trade Commission imposed in 2019 over the same scandal.

The company is appealing. Meta has paid nothing; the money stays tied up, and interest keeps accruing until the appeal is decided.

Shares rose about 2% to $707.81 in afternoon trading after the ruling but faded to close at $697.52, up 0.47%. Third-quarter earnings, not the ruling, drove the after-hours gain of 2.16% to $712.61. The question is whether growing legal bills change the case for a company still growing revenue 26%.

How 43 Million Violations Became a $25 Billion Order On September 25, jurors found 26 of 29 statements by the company and its leaders misleading. They counted each statement once for every Facebook user or New Mexico resident who saw it, which produced more than 43 million violations of state consumer protection law.

State law allows up to $5,000 per violation. Mathew found more than $219 billion justified but cut it, and all of the money goes to New Mexico schools.

At the October 1 hearing, state lawyer Randi McGinn asked for $35 billion to $40 billion, saying, “This court should speak to Meta in the only language it understands, which is money.” Meta Platforms asked for a $3.45 billion cap, arguing the state never proved any consumer was misled. The judge’s number is much closer to the state’s request.

Why “Core Business Practices” Raises the Stakes Mathew wrote that the conduct “goes to the heart of Facebook’s core business practices” and that “Facebook promised users that they (the users) controlled their data. This was false.” He found that the company’s “most senior leadership,” including CEO Mark Zuckerberg and former COO Sheryl Sandberg, misrepresented its data privacy practices.

That language links the finding to the business model and to the top executives. An appeals court will have a harder time narrowing it, and lawyers in other states can cite it in their own cases.

Chief legal officer C.J. Mahoney said Meta is “confident we will prevail on appeal.” Attorney General Raúl Torrez called it “one of the largest, if not the single largest state verdict against a company in American history.”

Legal Costs Are Becoming a Recurring Expense Torrez sued in 2021 after Cambridge Analytica collected data from as many as 87 million users. Earlier in 2026, New Mexico won $942 million from Meta in two trials over child exploitation and safety claims.

Meta’s third quarter also included a $9.89 billion charge for a separate matter: the August agreement with 52 attorneys general over teen mental health, which provides for payments of up to about $18.59 billion. The New Mexico ruling came after the quarter closed, and Meta has not said whether or when it will book the charge.

The penalty equals about 2.5 times third-quarter net income of $9.86 billion. D.A. Davidson analyst Gil Luria said, “Meta is worth nearly two trillion dollars, and will likely continue to appeal these cases and drag them out.”

What the $25 Billion Order Means for META Stock The legal costs look manageable for Meta because third-quarter revenue reached $64.60 billion, and a company with an after-hours market value of about $1.78 trillion can absorb a $25 billion order that is still under appeal.

The risk is that the cases keep multiplying and legal costs permanently reduce margins. Even so, an ad business growing that fast can pay those bills.

Check Meta’s next quarterly filing for any money set aside for New Mexico, and watch whether shares close below $658.49, where they started 2026. A close under that level would mean investors see legal costs as more than a routine expense, and this view would be wrong.

Contact [email protected] for any questions or corrections.

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Meta Platforms (META - Free Report) .

Meta Platforms currently has an average brokerage recommendation (ABR) of 1.29, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 56 brokerage firms. An ABR of 1.29 approximates between Strong Buy and Buy.

Of the 56 recommendations that derive the current ABR, 47 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 83.9% and 3.6% of all recommendations.

Brokerage Recommendation Trends for META

Check price target & stock forecast for Meta Platforms here>>>

The ABR suggests buying Meta Platforms, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in META?In terms of earnings estimate revisions for Meta Platforms, the Zacks Consensus Estimate for the current year has declined 7% over the past month to $29.94.

Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Meta Platforms. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, it could be wise to take the Buy-equivalent ABR for Meta Platforms with a grain of salt.

Baskin Financial Services Inc. trimmed its stake in shares of Meta Platforms, Inc. (NASDAQ:META – Free Report) by 1.6% during the 3rd quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 52,212 shares of the social networking company’s stock after selling 861 shares during the period. Meta Platforms accounts for 3.1% of Baskin Financial Services Inc.’s holdings, making the stock its 17th biggest position. Baskin Financial Services Inc.’s holdings in Meta Platforms were worth $37,863,000 as of its most recent filing with the Securities & Exchange Commission.

Several other institutional investors have also modified their holdings of the stock. State Street Corp raised its position in shares of Meta Platforms by 4.0% during the 2nd quarter. State Street Corp now owns 92,033,963 shares of the social networking company’s stock worth $51,841,811,000 after purchasing an additional 3,510,123 shares during the last quarter. Bank of America Corp DE lifted its stake in Meta Platforms by 14.6% in the 1st quarter. Bank of America Corp DE now owns 21,038,035 shares of the social networking company’s stock valued at $12,036,491,000 after buying an additional 2,673,494 shares in the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its holdings in Meta Platforms by 1.3% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 12,836,063 shares of the social networking company’s stock worth $7,230,426,000 after buying an additional 162,909 shares during the last quarter. Amundi boosted its holdings in Meta Platforms by 18.1% in the 1st quarter. Amundi now owns 11,858,972 shares of the social networking company’s stock worth $6,784,873,000 after buying an additional 1,815,017 shares during the last quarter. Finally, Dimensional Fund Advisors LP boosted its holdings in Meta Platforms by 4.0% in the 1st quarter. Dimensional Fund Advisors LP now owns 10,429,812 shares of the social networking company’s stock worth $5,964,745,000 after buying an additional 404,948 shares during the last quarter. Institutional investors and hedge funds own 79.91% of the company’s stock.

Insider Activity at Meta Platforms In other Meta Platforms news, CFO Susan J. Li sold 9,196 shares of the firm’s stock in a transaction on Tuesday, August 18th. The stock was sold at an average price of $550.61, for a total value of $5,063,409.56. Following the completion of the sale, the chief financial officer directly owned 13,186 shares of the company’s stock, valued at $7,260,343.46. This trade represents a 41.09% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Andrew Bosworth sold 7,848 shares of Meta Platforms stock in a transaction on Tuesday, August 18th. The stock was sold at an average price of $558.00, for a total value of $4,379,184.00. Following the transaction, the chief technology officer owned 828 shares in the company, valued at approximately $462,024. This represents a 90.46% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 149,906 shares of company stock valued at $102,347,409 in the last three months. Company insiders own 13.53% of the company’s stock.

Wall Street Analyst Weigh In A number of brokerages have commented on META. KeyCorp reissued an “overweight” rating and set a $900.00 target price on shares of Meta Platforms in a report on Tuesday, October 13th. Monness Crespi & Hardt raised their target price on Meta Platforms from $730.00 to $830.00 and gave the company a “buy” rating in a research report on Monday, September 28th. Rosenblatt Securities reaffirmed a “buy” rating and issued a $886.00 price target on shares of Meta Platforms in a research note on Tuesday. Sanford C. Bernstein reaffirmed an “outperform” rating and issued a $800.00 price target (down from $850.00) on shares of Meta Platforms in a research note on Thursday, July 30th. Finally, Erste Group Bank upgraded Meta Platforms from a “hold” rating to a “buy” rating in a research report on Tuesday, July 7th. Three research analysts have rated the stock with a Strong Buy rating, forty-seven have issued a Buy rating and eight have given a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $811.24. Get Our Latest Stock Report on Meta Platforms

Key Meta Platforms News Here are the key news stories impacting Meta Platforms this week:

Positive Sentiment: Revenue and earnings exceeded expectations. Meta reported record quarterly revenue of approximately $64.6 billion, up 26% year over year and above the roughly $63.3 billion consensus estimate. Earnings of $7.40 per share also surpassed analyst expectations near $6.54. The results highlighted continued strength in advertising volume, pricing and monetization. Meta Platforms Tops Q3 Earnings and Revenue Estimates Positive Sentiment: Muse is gaining meaningful traction. Meta said its AI assistant Muse has more than 10 million users, with shopping among the leading activities. Investors see the product as a potential way to increase engagement, improve recommendations and generate additional advertising and commerce revenue across Meta’s roughly 3.5 billion-user ecosystem. Meta Says Muse Has Over 10M Users Positive Sentiment: Analysts view the core business and AI returns favorably. Commentary following the report cited strong ad efficiency, higher engagement and healthy adjusted operating margins, supporting bullish views that Meta’s AI investments are beginning to contribute to the advertising business. Meta Q3 Strong Growth Makes This a Strong Buy Neutral Sentiment: Meta is expanding AI funding while trying to manage cash pressure. Third-quarter capital expenditures reached about $34.9 billion, and the company raised the low end of its annual spending outlook. A new nonvoting Class C share is intended to help fund the AI buildout without reducing Mark Zuckerberg’s voting control, but it introduces potential dilution and reinforces concerns about heavy future investment. Meta to Issue New Class of Shares Negative Sentiment: Legal liabilities remain a major overhang. A $9.9 billion charge tied to a teen social-media lawsuit weighed on reported profit, while a New Mexico court ordered Meta to pay $25 billion in a separate privacy case. Meta plans to appeal, but the judgment increases regulatory, financial and reputational risks. Meta Ordered to Pay $25 Billion to New Mexico Negative Sentiment: AI profitability is not yet established. Zuckerberg said Muse carries very high computing costs, and Reality Labs could lose approximately $15 billion next year. These losses may limit free cash flow and keep investors sensitive to whether AI growth ultimately produces returns exceeding the cost of the buildout. Meta CEO Says Muse and Reality Labs Are Unprofitable Negative Sentiment: Insider selling added a modest cautionary signal. COO Javier Olivan sold shares under a pre-arranged Rule 10b5-1 plan. Because the transactions were scheduled in advance, they are not necessarily a judgment on Meta’s outlook, but they reduce his direct ownership. SEC Insider Ownership Filing Meta Platforms Trading Up 0.5% META opened at $697.52 on Thursday. The firm has a market capitalization of $1.78 trillion, a price-to-earnings ratio of 26.27, a price-to-earnings-growth ratio of 1.28 and a beta of 1.19. The company’s 50 day simple moving average is $662.27 and its two-hundred day simple moving average is $629.10. Meta Platforms, Inc. has a 1-year low of $520.26 and a 1-year high of $779.82. The company has a debt-to-equity ratio of 0.32, a current ratio of 2.23 and a quick ratio of 2.23.

Meta Platforms (NASDAQ:META – Get Free Report) last posted its quarterly earnings results on Wednesday, October 21st. The social networking company reported $7.40 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $6.54 by $0.86. Meta Platforms had a return on equity of 33.18% and a net margin of 29.83%. The business had revenue of $64.60 billion during the quarter, compared to analyst estimates of $63.34 billion. During the same period in the prior year, the business earned $7.25 earnings per share. The business’s revenue was up 26.1% compared to the same quarter last year. Analysts expect that Meta Platforms, Inc. will post 27.32 EPS for the current fiscal year.

Meta Platforms Announces Dividend The business also recently disclosed a quarterly dividend, which was paid on Monday, September 28th. Investors of record on Monday, September 21st were given a dividend of $0.5250 per share. The ex-dividend date was Monday, September 21st. This represents a $2.10 dividend on an annualized basis and a yield of 0.3%. Meta Platforms’s dividend payout ratio (DPR) is presently 7.91%.

About Meta Platforms (Free Report)

Meta Platforms, Inc is a technology company that develops social networking, messaging, virtual and augmented reality, and artificial intelligence products. The company’s principal platforms include Facebook, Instagram, Messenger, WhatsApp, and Threads, which enable users to connect, communicate, share content, and discover products and services.

Meta also operates Reality Labs, its division focused on virtual, augmented, and mixed reality technologies. Reality Labs develops products such as Meta Quest virtual reality headsets and related software and experiences, along with research and hardware intended to support immersive computing.

Read More Five stocks we like better than Meta Platforms GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? Intercepting Growth: Karman Secures $218M Lockheed Martin Deal Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs Chip Stocks Have Pulled Back—Here’s How 3 Semiconductor ETFs Stack Up for Investors Want to see what other hedge funds are holding META? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Meta Platforms, Inc. (NASDAQ:META – Free Report).

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Meta META shares slipped in premarket trading on Thursday even after the Facebook parent delivered better-than-expected third-quarter revenue, as investors weighed the cost of its aggressive artificial intelligence expansion. The stock had initially climbed in after-hours trading on Wednesday following the results, but the gains proved short-lived as the stock was down over 1% early Thursday morning.

Meta Platforms, Inc. delivered strong Q3 results, with 26.1% Y/Y revenue growth and AI investments driving core business improvements. META's AI-driven ad model GEM increased conversions by 18.9% and CTR by 12%, while the average ad price rose 14% Y/Y. Muse, META's AI assistant, achieved 10.9 million downloads in 40 days and shows higher retention than competitors, with monetization potential ahead.

When Mark Zuckerberg privately told Meta's board he planned to sell his Palo Alto home and leave California, the board did not try to change his mind. It rewrote the company's stock structure instead.

Mark Zuckerberg told the board of Meta Platforms (NASDAQ:META | META Price Prediction) that he might leave California over a proposed billionaire tax. The board responded by creating a new class of stock to keep him in the state. An information statement filed with the SEC on October 21, 2026 shows that from July to September he told the board’s Special Committee he was first evaluating, and later planning, a move of his primary residence out of California.

Under the final deal, he commits to remain a resident of California, or of wherever Meta has its headquarters, for eight years, absent “material unforeseen circumstances.” He made these statements in private to directors, and the filing reports them.

On earnings day, Meta closed at $697.52, up 0.47%. After hours, it traded at $712.61, up 2.16%, which lines up with the quarterly results.

What Zuckerberg Told the Board, Month by Month On July 8, the committee heard that if he paid the tax by selling Class B shares, his voting interest could fall to about 53% from around 60.6% now. An August 3 letter said he “was considering establishing residence outside of California.”

By August 4, he “intended to establish residence outside California” and had been told he needed to do so before the November 3, 2026 election. At a September 9 board dinner, he said he planned to list his Palo Alto home for sale on September 13, 2026. No source has confirmed that he actually listed it.

The September 10 term sheet then stated “Mr. Zuckerberg’s intention to remain a resident of California.” That pledge moves with Meta’s headquarters to “any other jurisdiction” and applies only while he leads the company. The filing names no penalty for breaking it.

Proposition 40 Puts a Multi-Billion Dollar Bill in Play Proposition 40 would charge a one-time excise tax of up to 5% on California residents worth more than $1 billion. The rate phases in fully at $1.1 billion, and the tax can be paid over five annual installments. Residency is fixed as of January 1, 2026, so it is unclear how moving before the vote would have helped him.

The filing describes the potential bill only as “multi-billion dollar.” KTVU estimates his bill at around $12 billion, says the measure would apply to about 200 Californians, and expects it to raise about $100 billion. The Telegraph puts his liability at $11.45 billion.

Polls disagree on whether it will pass. A TrueDot poll showed 46% yes and 43% no. A Manhattan Institute poll showed 35% yes and 50% no. Two rival measures on the ballot would cancel it if either gets more yes votes.

Why Meta’s Board Paid in Share Structure The committee called it “critically important to keep Mr. Zuckerberg in a leadership position.” Without a fix, it said, he “would effectively be paying to serve as the Company’s chief executive officer while residing in California.”

The fix is a non-voting Class C stock that takes effect in January 2027. Of his Class C dividend shares, 20% can be sold freely, which Reuters estimates is about 10% of his overall economic stake. That gives him cash for a tax bill without giving up any votes.

Bloomberg estimates his net worth at $246 billion, and he owns about 13.4% of Meta. The deal reduces key-person risk, meaning the risk of losing an executive the company depends on. It also sets a precedent of a board restructuring its capital structure around one holder’s personal taxes.

What the Class C Deal Means for Meta Shareholders Third-quarter revenue of $64.60 billion rose 26.07%. GAAP EPS of $3.83 missed expectations because of a $9.89 billion litigation charge. Without that charge, EPS would have been $7.40.

Anyone who bought Meta already accepted founder control, so this deal keeps the arrangement shareholders signed up for. It also removes the distraction of a chief executive moving out of state in the middle of an AI spending cycle.

The date to watch is November 3, 2026. If Proposition 40 fails and Meta still issues Class C stock in January 2027 on these terms, the board will have restructured the company for a tax that never came, and shareholders will have reason to question its judgment.

Contact [email protected] for any questions or corrections.

Anthropic just put a proactive AI agent on your phone that reads your email and shops for you before you ask, and it is heading straight into territory Meta already claimed with 10 million users. The real fight is over…

Anthropic built its business selling Claude to companies and developers. Now it wants a spot on your phone, where it would manage your inbox and your shopping cart before you ask.

The company has introduced Claude Duet, its first consumer-facing AI agent, as a research preview with a waitlist. It will eventually be available to Pro and Max subscribers.

Duet is a proactive agent. It handles tasks such as shopping and reading email without waiting for you to ask, putting it up against OpenAI’s agents and Meta Platforms’ (NASDAQ:META | META Price Prediction) Muse agent.

Anthropic is coming late. Meta said on October 21, 2026, that more than 10 million people in the US and Canada had already set up Muse.

For investors, the question is who gets the value once every leading lab offers an agent. Meta closed at $697.52. The stock is up 5.93% year to date but down 5.9% over the past month.

Proactive Agents Turn Trust Into the Product
A chatbot answers questions. A proactive agent reads your email and spends your money, so its mistakes cost real dollars.

That makes permissions central. You have to grant account access, and someone has to carry the liability when an agent buys the wrong item.

Anthropic’s safety reputation is likely its best edge. A lab known for care may have an easier time getting access to inboxes and payment cards.

Meta is working on the same problem. Mark Zuckerberg said Meta plans a “Muse Confidential VM,” “which will make it so that even Meta cannot see your content.”

Meta’s Distribution Lead Will Be Hard to Close
Meta’s apps reach 3.64 billion people daily. Duet starts behind a waitlist inside a paid subscription.

In consumer technology, reach usually counts for more than model quality. Zuckerberg said shopping is Muse’s biggest use case, with over a quarter of active users engaging in shopping and an average purchase size above $200.

Meta had to ask Stripe to raise credit limits in the first week. Muse also comes to Meta smart glasses next month.

Switching costs are still low, however. If Duet handles email or purchases better, it could pull users away from free products.

Ads Versus Subscriptions Will Set the Margins
Anthropic plans to make money from paid levels. Meta wants the core product free for most people, with businesses paying commerce fees and power users paying for advanced models.

Shopping agents put search and display advertising at risk, because price-comparison software never scrolls past an ad. Meta wants to take a cut of the transaction instead. It is building an agentic-commerce protocol with partners including Sierra, Walmart, Stripe and Shopify.

Its ad engine pays for all of this. Third-quarter advertising revenue reached $63.06 billion, helped by a 14% rise in ad pricing.

Computing Bills Could Outrun Early Revenue
Agents run around constantly, which increases demand for chips and cloud capacity. Meta’s third-quarter capital expenditures were $34.9 billion, and it expects $135 billion to $145 billion for 2026.

That spending drove quarterly free cash flow to-$2.1 billion. CFO Susan Li said, “We expect total serving costs to rise” as Muse grows.

Meta expects to make Muse more than 10x more cost-efficient within a year, though the data-center expansion behind every leading agent still has to be powered and cooled by someone (we profiled seven of those suppliers in a free report, here). Anthropic has no advertising cash behind it, so subscriptions will have to cover those costs.

Privacy rules, purchase errors, and models becoming interchangeable are risks for every company here. Meta also recorded a $9.89 billion charge tied to a settlement with state attorneys general.

Whether AI Agents Can Pay Off for Investors
The bull case is that agents open new revenue in commerce, subscriptions, and enterprise software. Li said Meta’s new AI businesses could start adding revenue in 2027.

The bear case is cost. Meta’s free cash flow has already gone negative, and Duet adds another well-funded competitor that could push prices down.

On balance, Meta is the clearest listed example of a company already building revenue around AI agents. Revenue grew 26.1% to $64.60 billion while the company paid for Muse, as our live coverage of the quarter showed.

Without the legal charge, EPS would have been $7.40, and the stock trades at a P/E of about 25. It’s worth tracking whether Duet’s waitlist turns into paying users, but Meta’s reach puts it in a stronger position today.

Contact [email protected] for any questions or corrections.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Meta Platforms, Inc. delivered solid Q3 revenue growth, but profitability was impacted by litigation charges and surging capex. META remains heavily reliant on advertising, with AI investments primarily boosting ad performance rather than generating new product-driven revenue streams. Litigation costs are becoming a recurring expense, and Reality Labs continues to be a significant drag on profitability with annual losses around $15B-$16B.

22.10.2026 12:59, BAAFB, META

Americká společnost Meta Platforms, provozovatel sociálních sítí Facebook, Instagram a dalších, zveřejnila včera po uzavření trhu hospodářské výsledky za třetí kvartál roku 2026. Výnosy překonaly očekávání, ziskovost ale negativně ovlivnil náklad ve výši 9,89 mld. USD spojený s dohodou s generálními prokurátory amerických států. Společnost zúžila výhled kapitálových výdajů pro tento rok, zvýšila výhled celkových nákladů a oznámila zavedení nové třídy akcií bez hlasovacích práv (podobně jako to již od roku 2014 má Google, resp. Alphabet). Analytici hodnotili výsledky kladně a vyzdvihli silný start AI agenta Muse.

Výsledky společnosti Meta Platforms (META) za 3Q 2026   3Q 2026 Konsensus 3Q 2026 3Q 2025 Výnosy (mld. USD) 64,60 63,33 51,24 Čistý zisk (mld. USD) 9,86* -- 2,71** Zisk na akcii (EPS, USD/akcie) 3,83* 3,57 1,05** *Čistý zisk negativně ovlivnil náklad ve výši 9,89 mld. USD spojený se srpnovou dohodou s generálními prokurátory amerických států o urovnání sporů týkajících se duševního zdraví dospívajících a sociálních sítí. Bez tohoto nákladu (po zohlednění daňového efektu) by čistý zisk dosáhl 19,05 mld. USD a zisk na akcii 7,40 USD.

**Čistý zisk za 3Q 2025 negativně ovlivnil jednorázový nehotovostní náklad na daň z příjmu ve výši 15,93 mld. USD v souvislosti se zavedením zákona „One Big Beautiful Bill Act“.

Výsledky za 3Q Výnosy meziročně vzrostly o 26 % na 64,60 mld. USD. Z toho výnosy z reklamy činily 63,06 mld. USD, což představuje rovněž meziroční růst o 26 % a překonání tržního očekávání ve výši 61,85 mld. USD. Ostatní výnosy meziročně vzrostly o 59 % na 1,10 mld. USD podle očekávání.

Výnosy segmentu Family of Apps (sociální sítě Facebook, Instagram, Threads a aplikace Messenger a WhatsApp) vzrostly meziročně o 26 % na 64,16 mld. USD a překonaly očekávání nastavené na 62,75 mld. USD. Provozní zisk tohoto segmentu meziročně klesl o 31 % na 17,12 mld. USD, konsensus činil 23,3 mld. USD.

Výnosy segmentu Reality Labs (hardware, software a obsah spojený s virtuální, smíšenou a rozšířenou realitou) meziročně klesly o 5,7 % na 443 mil. USD, přičemž očekávání činilo 517,7 mil. USD. Provozní ztráta tohoto segmentu klesla na 4,13 mld. USD oproti ztrátě 4,43 mld. USD před rokem a byla nižší než očekávaná ztráta ve výši 5,13 mld. USD.

Celkové náklady meziročně vzrostly o 68 % na 51,61 mld. USD, včetně zmíněného nákladu ve výši 9,89 mld. USD. Celkový provozní zisk společnosti meziročně klesl o 37 % na 12,99 mld. USD, trh očekával 20,85 mld. USD. Bez nákladu spojeného s dohodou by provozní zisk dosáhl 22,88 mld. USD.

Kapitálové výdaje dosáhly ve třetím kvartále 34,91 mld. USD oproti 19,37 mld. USD před rokem. Za prvních devět měsíců roku činily 85,82 mld. USD. Volný hotovostní tok byl ve 3Q záporný ve výši 2,12 mld. USD oproti kladným 10,63 mld. USD před rokem.

Počet zobrazených reklam meziročně vzrostl o 10 %, pod očekáváním 12,3 %. Průměrná cena za reklamu meziročně vzrostla o 14 % při očekávání +11,2 %.

Průměrný denní počet uživatelů služeb ze skupiny Family of Apps dosáhl 3,64 mld., což představuje meziroční růst o 2,8 %, očekávání bylo nastaveno na 3,66 mld.

Průměrný denní počet uživatelů služeb ze skupiny Family of Apps, zdroj: Meta Platforms

Počet zaměstnanců ke konci září činil 66 775, meziročně o 15 % méně.

Výhled Ve 4Q očekává Meta výnosy v rozmezí 73 až 76 mld. USD. Wall Street predikovala 73,57 mld. USD. Výhled počítá s negativním dopadem měnových kurzů na meziroční růst výnosů ve výši přibližně 1 %.

V celém roce Meta očekává celkové náklady v rozmezí 175 až 179 mld. USD, přičemž dříve společnost projektovala 165 až 169 mld. USD. Očekávalo se 170,51 mld. USD. Zvýšení výhledu zohledňuje náklad ve výši 9,89 mld. USD spojený se soudními spory. Bez tohoto nákladu společnost nadále očekává, že provozní zisk za rok 2026 překoná loňskou úroveň.

Kapitálové výdaje by měly být v rozmezí 135 až 145 mld. USD. Meta dříve avizovala 130 až 145 mld. USD. Trh predikoval 139,87 mld. USD.

Ztráta segmentu Reality Labs by letos měla dosáhnout 18 až 19 mld. USD a v příštím roce se snížit zhruba na 15 mld. USD, jak společnost přesouvá investice k dalším prioritám, a to především k AI.

Nová třída akcií bez hlasovacích práv Představenstvo schválilo vytvoření nové třídy veřejně obchodovaných akcií třídy C bez hlasovacích práv s účinností od 19. ledna 2027. Akcionáři obdrží jednorázovou akciovou dividendu ve formě jedné akcie třídy C za každou akcii třídy A a B. Po výplatě dividendy by tržní cena akcií třídy A měla odrážet efekt akciového rozštěpení 2:1, přičemž hlasovací síla akcionářů se nezmění. Podobný krok učinila společnost Google již v roce 2014.

Nové akcie mají sloužit k získávání kapitálu, odměňování zaměstnanců, případným akvizicím a dalším obecným korporátním účelům. Mají zároveň zajistit, že zakladatel a generální ředitel Mark Zuckerberg bude společnost i nadále vést. Akcie třídy C mají být kótovány na burze Nasdaq.

Komentář Marka Zuckerberga „V tomto kvartálu jsme dosáhli zásadních milníků na cestě k poskytování osobní superinteligence pro každého, včetně spuštění Muse a Muse Wonder, našeho prvního frontier modelu,“ uvedl zakladatel a generální ředitel Mark Zuckerberg. „Naše investice se vyplácejí, hlavní byznys je silný a ve všech oblastech vidíme rychlé tempo,“ dodal.

Během konferenčního hovoru Zuckerberg uvedl, že AI agenta Muse využilo za prvních šest týdnů v USA a Kanadě více než 10 mil. lidí. „Teď, když je zřejmé, že Muse odpovídá poptávce na trhu, vstupujeme do nové, více provozní fáze, která se zaměřuje na jeho rozšiřování.“

Pohled analytiků Analytici z Morgan Stanley uvedli, že hlavní byznys Mety má před sebou dlouhý prostor pro růst, Muse se rozbíhá a společnost má plán, jak jej díky zlepšující se efektivitě výpočetního výkonu ziskově škálovat. Čas strávený na Facebooku a Instagramu podle nich meziročně vzrostl dvouciferným tempem.

Podle analytiků JPMorgan vykázala Meta solidní výsledky za 3Q s pozitivním překvapením ve výnosech, provozním zisku i zisku. Poznamenávají, že Muse má silný start, když se registrovalo 10 mil. lidí v USA a Kanadě.

Analytici z Evercore ISI označili výsledky za fundamentálně velmi solidní a uvedli, že Meta zůstává zdaleka nejrychleji rostoucí reklamní platformou svého rozsahu v internetovém sektoru.

Analytici z Truist Securities poznamenali, že silné výsledky táhla monetizace reklamy podpořená zlepšeními v AI. Zároveň upozornili, že návratnost investic do AI bude podle společnosti trvat déle a Meta bude i nadále agresivně investovat.

Analytici z Vital Knowledge uvedli, že hlavní reklamní byznys si nadále vede dobře. Lepší než očekávaný volný hotovostní tok podle nich souvisí jen s načasováním kapitálových výdajů a posunutí spodní hranice jejich výhledu ukazuje, že společnost výdaje neomezuje.

Akcie Meta Akcie Meta Platforms (META) v předburzovní fázi obchodování oslabují o 1,35 % na 688,07 USD. Akcie se pod tickerem BAAFB obchodují také v korunách na RM-SYSTÉMu za 14 594 Kč.

Akcie Meta Platforms (META) před výsledky na 697,52 USD Ukazatel   Ukazatel   Kapitalizace (mld. USD) 1783,0 P/E 20,7 Vývoj za letošní rok (%) +5,7 Očekávané P/E 21,2 52týdenní minimum (USD) 520,3 Prům. cílová cena (USD) 833,7 52týdenní maximum (USD) 779,8 Dividendový výnos (%) 0,3 Zdroj: Meta Platforms, Bloomberg

Michal Bárta, Fio banka, a.s.

Credit: Bastian Riccardi from Pexels

Meta and its social media platforms Facebook and Instagram are facing a class-action lawsuit in Australia over allegations addictive design features are harming children and teenagers.

The suit filed in the Federal Court on behalf of eight applicants seeks to recover compensation for Facebook and Instagram users who were exposed to harmful content or developed an addiction to social media, law firm Minter Ellison and Litigation Lending said in a statement.

The Federal Court in Sydney issued on Monday a suppression order stopping publication of details of the claim and the identity of the applicants, court documents show.

"We are aware of this claim and we will defend ourselves vigorously," a Meta spokesperson said in a statement.

Litigation Lending Services said it was funding the class action for Australian families who "would have no practical means of pursuing these claims against a global technology giant."

"This proceeding raises important questions about the design and operation of social media platforms and their impact on children and teenagers in Australia," Minter Ellison partner William Nolan said in a statement.

In August, Meta agreed to pay up to $17.7 billion in the United States to settle claims that it deliberately engineered its platforms to hook young users.

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Facing a potentially giant tax bill that could threaten his voting power, Zuckerberg was days away from listing his Palo Alto home when Meta agreed to create a new class of stock.

Meta Platforms is preparing to spend as much as US$145 billion this year as the Facebook and Instagram owner accelerates investment in artificial intelligence infrastructure, chips and data centres.

The technology giant lifted the lower end of its 2026 capital expenditure forecast to US$135 billion from US$130 billion, leaving the top end unchanged at US$145 billion.

The increase came as Meta reported better-than-expected third-quarter revenue of US$64.6 billion, ahead of Wall Street expectations of around US$63.4 billion, demonstrating that its core advertising business continues to generate the cash needed to support its enormous AI ambitions.

Meta shares strengthened in after-hours trading following the result.

AI investment accelerates
Meta has emerged as one of the biggest spenders in the global race to develop advanced artificial intelligence.

The company is investing heavily in graphics processing units, custom chips, electricity infrastructure and increasingly large data centres capable of training and operating sophisticated AI models.

Chief executive Mark Zuckerberg has reorganised significant parts of the business around AI, with Meta attempting to compete directly with OpenAI, Google and Anthropic.

Its investments are increasingly focused on both improving Facebook, Instagram and advertising systems and building standalone AI products.

The company’s newer AI services have helped strengthen investor confidence that the spending could eventually generate revenue beyond the traditional advertising business.

Cash flow feels pressure
The scale of the investment is nevertheless beginning to reshape Meta’s financial profile.

Capital expenditure has increased dramatically as data centre construction and computing costs rise, putting pressure on the enormous free cash flows historically generated by Facebook and Instagram.

Meta has also announced plans for a two-for-one share split and the creation of a new class of non-voting shares.

The structure could give Meta additional flexibility to finance acquisitions, issue equity to employees and fund future AI investment without reducing Zuckerberg’s voting control.

The company remains highly profitable, but investors are paying increasing attention to how quickly AI investment can generate returns as spending across the technology industry reaches unprecedented levels.

AI spending race broadens
Meta is far from alone.

Microsoft, Alphabet, Amazon and other technology giants are collectively committing hundreds of billions of dollars to AI-related infrastructure, creating enormous demand for semiconductors, electricity, networking equipment and data centres.

The expansion has also raised concerns about whether sufficient electricity generation and grid infrastructure can be built quickly enough to support projected computing demand.

For Meta, however, the latest results suggest its core business remains strong enough to fund the investment cycle for now.

The central question is increasingly whether spending approaching US$145 billion a year will establish a durable competitive advantage in AI or eventually become a drag on returns.

For the moment, strong revenue growth is giving Meta room to keep spending, making the company one of the clearest examples of how the global AI race is transforming the economics of Big Tech.

The billionaire told Meta's board that he planned to list his Silicon Valley home for sale. The company remade its stock structure to help him pay the tax if voters pass it.

On its third quarter of 2026 earnings call, held on Oct. 21, 2026, Meta (META +0.47%) announced the launch of its Muse personal agent, an artificial intelligence (AI) assistant designed for personal superintelligence. Rapid adoption of new AI tools and ad system upgrades is expanding user engagement and establishing new monetization paths. Three things management said stand out.

1. Muse Reaches 10 Million Users as Commerce Drives AdoptionMeta introduced its Muse personal agent, an AI assistant that executes tasks for users, and recorded rapid adoption driven by unexpected shopping volume. Building a large consumer network enables the company to generate transaction fees from business partners over time.

In just a month and a half, more than 10 million people in the US and Canada have set up Muse personal agents, Growth continues to be strong, and we have been number 1 in the App Store almost every day.
-- Mark Elliot Zuckerberg, Chief Executive Officer2. Reality Labs Narrowing Losses to $15 Billion as Focus ShiftsManagement is pacing investments in virtual reality (VR) hardware to prioritize software and personal agent models. Reducing operating losses in this segment's profit and loss (P&L) statement frees up capital to fund high-return AI infrastructure.

So with these factors combined, we expect that the P&L of Reality Labs to improve from here with operating loss coming down to approximately $15 billion next year and trending toward profitability from there.
-- Mark Elliot Zuckerberg, Chief Executive Officer3. First-Party AI Models Cut Content Processing Costs by Over 80%Transitioning content processing to internal Muse models improves recommendation accuracy across social feeds while drastically lowering compute expenses. Lower unit costs strengthen profit margins as engagement scales across apps.

In offline evaluations, these models are outperforming our prior production models and are reducing per unit content processing costs by more than 80% across Instagram threads, Facebook, and ads.
-- Susan J. Li, Chief Financial OfficerLooking AheadEngagement and ad efficiency are accelerating across Meta's social platforms. Infrastructure scale and global distribution give the business room to fund AI tools while tracking compute efficiency.

The benefits our AI investments are delivering to the core business combined with emerging opportunities from model advances and product launches, position us to sustain strong overall revenue growth throughout 2027.
-- Susan J. Li, Chief Financial OfficerDeploying personal agents to billions of users positions the company for long-term network monetization.

If compute efficiency continues improving quickly for another few years, which we think is highly likely, then Muse will be highly profitable over the years.
-- Mark Elliot Zuckerberg, Chief Executive OfficerThe Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.

Meta shares surged more than 4% in early after-hours trading Wednesday as the Facebook parent reported a 26% jump in quarterly revenue and unveiled plans for a new class of stock that could help finance its massive artificial intelligence spending.

Shares of the social media giant jumped 4% to $726 in after-hours trading as of 4:05 p.m. Wednesday, up nearly $30 from their closing price of $697.52.

The rally came as Mark Zuckerberg’s company reported third-quarter revenue of $64.6 billion, up 26% from $51.2 billion a year earlier, as advertising sales climbed 26% to $63.1 billion.

Meta CEO Mark Zuckerberg said the company’s artificial intelligence investments are paying off as quarterly revenue surged 26%. Getty Images The Menlo Park, Calif.-based tech giant also forecast fourth-quarter revenue of $73 billion to $76 billion and signaled plans to continue spending aggressively on artificial intelligence next year.

“Our investments are paying off, the core business is strong, and we’re seeing velocity across the board,” Zuckerberg said in a statement.

Meta said advertising impressions across its family of apps, which includes Facebook and Instagram, rose 10% from a year earlier, while the average price per ad jumped 14%.

The company reported net income of $9.86 billion, or $3.83 per diluted share, compared with $2.71 billion, or $1.05 per diluted share, in the year-earlier period.

But Meta’s earnings were weighed down by a nearly $10 billion charge tied to a sweeping legal settlement.

Meta shares surged more than 4% in after-hours trading Wednesday after the Facebook parent reported stronger-than-expected quarterly revenue. Meta booked a $9.89 billion charge tied to an August agreement with 52 state attorneys general to resolve litigation related to teen mental health and social media.

The agreement calls for payments of up to about $18.59 billion.

The charge helped drive a 37% decline in operating income to $12.99 billion, even as sales continued to climb.

Excluding the legal charge, Meta said operating profit would have reached $22.88 billion, while diluted earnings per share would have been $7.40.

The company’s bottom line also benefited from a sharply lower income tax provision of $3.14 billion, down from $18.95 billion in the year-earlier quarter.

Major shift Meta also unveiled a major shake-up of its capital structure, announcing plans for a new class of non-voting shares that could help bankroll its AI ambitions while preserving Zuckerberg’s leadership of the company.

The board approved the creation of publicly traded, nonvoting Class C shares, with the new structure set to take effect Jan. 19, 2027.

Meta’s existing Class A shares trade on Nasdaq, while the new Class C stock will carry no voting rights.

Meta announced plans to create publicly traded, nonvoting Class C shares that could help finance its growing artificial intelligence ambitions. REUTERS Under the plan, shareholders will receive one nonvoting Class C share for every Class A or Class B share they own, with the distribution date to be determined.

Meta said the distribution is expected to have the effect of a two-for-one stock split on the market price of its Class A shares, without changing shareholders’ voting power.

The announcement comes as Meta ramps up spending on artificial intelligence.

Capital expenditures, including principal payments on finance leases, totaled $34.91 billion during the third quarter.

The company now expects full-year capital expenditures of between $135 billion and $145 billion, narrowing its previous forecast of $130 billion to $145 billion.

The spending helped push quarterly free cash flow into negative territory, with an outflow of $2.12 billion compared with positive free cash flow of $10.63 billion a year earlier.

Meta said its AI investments were already generating additional advertising revenue through improved recommendations, stronger engagement and more efficient monetization.

“We hit major milestones this quarter toward delivering personal superintelligence for everyone — including launching Muse and Muse Wonder, our first frontier model,” Zuckerberg said.

The company also plans to shift investment away from its Reality Labs division, which develops virtual- and augmented-reality products, toward AI.

Meta is making a big push into AI, and it’s creating a new kind of stock that could help pay for it.

On Wednesday, as the company reported its third-quarter earnings, Semafor reported the company might issue non-voting stock, meaning shares that don’t give their owners a vote on company decisions, to help fund its push into artificial intelligence.

During Meta’s earnings call, the company confirmed that reporting. Meta’s chief financial officer, Susan Li, said the company plans to “create a new class of non-voting capital stock, which will be distributed to all existing shareholders through a stock dividend.”

Li later added that the company “created this new class of shares with the purpose of creating a publicly traded non-voting stock usable for capital raising, employee compensation, acquisitions, and other general corporate purposes while preserving the voting power of existing Class A and B shareholders.”

The shares will allow the company to maintain its current “founder-led structure,” she added. They will also expand its “funding tools and give us flexibility to invest behind the unprecedented momentum we’re seeing across every part of our business, driven by AI.”

Meta’s earnings were strong this past quarter, beating Wall Street expectations. The company made $64 billion in revenue, a jump of 26% from a year earlier. Its costs and expenses also rose too, however, by 68% year over year.

Reality Labs, the division responsible for Meta’s AR glasses, VR headsets, and VR software, continues to lose money, though less than it used to. The company said in its earnings report that it expects the division’s losses to shrink from its 2025 levels to between $18 billion and $19 billion.

Meta has made a big push into AI over the past year. The company has released several AI models, including Muse Spark and Muse Glimmer earlier this year. In recent weeks, it added Muse Wonder and Muse Spark Open, an open-weight model whose underlying parameters are publicly available for outsiders to use and build on. Meta also launched a coding agent for software developers called Muse Code. At its Meta Connect event this year, the company announced a new line of cute and cuddly avatars for AI assistant, Meta Muse, in a push to make its AI services more relatable (and also meme-able).

As far as can be discerned, those AI products are doing well. “In just a month and a half, more than 10 million people in the U.S. and Canada have set up Muse personal agents,” CEO Mark Zuckerberg said during Wednesday’s earnings call. “Growth continues to be strong, and we have been number one in the App Store almost every day.”

“Now that Muse has clear product-market fit, we are entering a new phase and a more operational phase that is focused on scaling it,” Zuckerberg added, claiming later that the company expects to grow the product’s appeal to eventually “serve billions of people.”

The company also noted that certain storm clouds linger on the horizon in the form of ongoing regulatory and legal issues. “We continue to monitor active legal and regulatory matters that could significantly impact our business and financial results,” said Li. “For example, we continue to see scrutiny on youth-related issues in several markets, and have a number of youth-related trials scheduled in the coming months in the United States.”

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Lucas is a senior writer at TechCrunch, where he covers artificial intelligence, consumer tech, and startups. He previously covered AI and cybersecurity at Gizmodo. You can contact Lucas by emailing [email protected].

Meta Platforms (META - Free Report) came out with quarterly earnings of $7.4 per share, beating the Zacks Consensus Estimate of $6.52 per share. This compares to earnings of $7.25 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +13.50%. A quarter ago, it was expected that this social media company would post earnings of $7.1 per share when it actually produced earnings of $6.18, delivering a surprise of -12.96%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Meta Platforms, which belongs to the Zacks Internet - Software industry, posted revenues of $64.6 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 1.88%. This compares to year-ago revenues of $51.24 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Meta Platforms shares have added about 5.2% since the beginning of the year versus the S&P 500's gain of 12.7%.

What's Next for Meta Platforms?While Meta Platforms has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Meta Platforms was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $8.18 on $73.65 billion in revenues for the coming quarter and $29.94 on $254.18 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Datavault AI Inc. (DVLT - Free Report) , has yet to report results for the quarter ended September 2026.

This company is expected to post quarterly loss of $0.03 per share in its upcoming report, which represents a year-over-year change of +90.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Datavault AI Inc.'s revenues are expected to be $8.5 million, up 193.1% from the year-ago quarter.