Key Stats for Meta Stock
- Price Change for Meta stock: -7%
- Current Share Price as of Oct. 29: $752
- 52-Week High: $796
- $META Stock Price Target: $868
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
Meta Platforms (META) stock dropped as much as 7% despite reporting third-quarter earnings that crushed Wall Street expectations.
The company posted adjusted earnings per share of $7.25, above the expected $6.67, while revenue came in at $51.24 billion, above the $49.41 billion estimate.
So why the selloff? The culprit was a massive $15.93 billion one-time tax charge related to President Trump’s One Big Beautiful Bill Act.
This non-cash charge sent Meta’s tax rate soaring to 87% for the quarter. Without this accounting hit, net income would have been $18.6 billion rather than $2.7 billion.
The good news is that Meta expects the new tax law to reduce its U.S. federal cash tax payments for the rest of 2025 and beyond. But the quarter’s accounting impact was severe enough to spook investors who were already sitting on substantial year-to-date gains.
Meta’s core advertising business continues firing on all cylinders. Ad revenue jumped 26% year-over-year to $50.08 billion, beating estimates of $48.5 billion.
It now has 3.54 billion daily active users across its family of apps, slightly ahead of Wall Street’s 3.5 billion projection.
Meta stock investors are also digesting the company’s aggressive spending plans. CFO Susan Li said total expenses for 2025 will now range between $116 billion and $118 billion, up from the previous range of $114 billion to $118 billion.
Additionally, Meta raised its capital expenditure outlook to $70 billion to $72 billion from the prior $66 billion to $72 billion range.
The Reality Labs division, which houses Meta’s virtual and augmented reality projects, posted an operating loss of $4.4 billion on just $470 million in sales.
While it was better than the expected $5.1 billion loss, it brings the division’s cumulative losses to over $70 billion since late 2020.
CEO Mark Zuckerberg defended the heavy infrastructure spending, saying Meta consistently needs more computing power for its AI initiatives. He emphasized that making larger investments in AI capacity is “very likely to be a profitable thing over some period.”
See analysts’ growth forecasts and price targets for META stock (It’s free!) >>>
What the Market Is Telling Us About META Stock
The market’s reaction suggests investors are concerned about Meta’s ballooning expenses, even as the business generates impressive revenue growth. Meta stock had already rallied 48% year-to-date before earnings, giving traders a reason to take profits after the mixed results.
Looking ahead, Meta guided fourth-quarter revenue between $56 billion and $59 billion. The midpoint came in slightly above analyst expectations, showing continued business momentum despite the spending concerns.
For Meta stock investors, the diversion is between the company’s strong advertising business and its massive investments in AI infrastructure and the metaverse.
The Ray-Ban AI glasses are showing promise as a potential new revenue stream, but the Quest VR headset business continues to struggle.
Li said Reality Labs revenue will actually decline in the fourth quarter compared to last year because Meta didn’t launch a new VR headset in 2025.
The bigger question is whether Meta’s aggressive AI spending will pay off in sustained competitive advantages—or if the company is overbuilding for uncertain future demand. With CapEx expected to grow even faster in 2026, this debate isn’t going away anytime soon.
Estimate a company’s fair value instantly (Free with TIKR) >>>
How Much Upside Does Meta Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
