Meta Platforms (NASDAQ: META) is set to report third-quarter results after the market close on Wednesday, with investor attention fixed on how the company is balancing its aggressive AI spending against a sizable legal charge tied to its child-safety settlement. That tension — between an AI buildout the company is funding aggressively and a free cash flow runway it does not expect to restore until 2029 — runs through nearly every number in this report.

The stock closed Tuesday near $694 and was down about 2% in Wednesday morning trading. Shares are up roughly 5% year to date. Meta rallied last month on early signs of traction for its Muse AI agent, then pulled back as concerns grew over the scale of its AI expenditure.

Options pricing implies a move of up to 6% in either direction by the end of the week, which would place the stock in a range between $650 and $738. That entire band sits below the $881 mean analyst price target, a divergence between how the options market is positioning and where Wall Street's published targets stand.

What Wall Street Expects

Analysts forecast revenue of approximately $63 billion, a 24% increase from a year earlier. Meta has beaten revenue estimates for 16 consecutive quarters.

Earnings per share forecasts differ by source: one report cites $6.54, while another cites $5.29, against $1.05 in the year-ago quarter. Last year's figure included a large noncash tax charge, without which Meta said EPS would have been $7.25.

This quarter, Meta expects a $10 billion charge connected to its August multistate settlement over child-safety issues. The previous quarter absorbed $2.4 billion in legal costs and $1.2 billion in severance.

Costs Are the Concern

Expenses are expected to grow faster than sales, and operating income is seen slipping slightly from last year. Capital spending may reach $145 billion this year, and Meta carried nearly $700 billion in long-term supply and lease commitments at last count. Set against the roughly $252 billion annualized revenue pace implied by this quarter's forecast, a $145 billion capital-spending year would absorb more than half of every revenue dollar — the arithmetic behind why cash generation, rather than top-line growth, has become this report's most scrutinized dimension.

Free cash flow has dried up, and the company does not expect it to return until 2029.

Meta released Muse in the second week of September. According to Similarweb, the AI agent has drawn more than 3 million daily users, though that represents less than 0.1% of Meta's overall user base. Last week, the company announced new Wonder AI models that it says rival those from OpenAI and Anthropic. Muse can complete retail purchases, with Meta collecting a small fee on transactions, although Amazon is blocking the agent from its platform.

Analyst Sentiment

Morgan Stanley's Brian Nowak raised his price target on Meta to $820 from $775 and maintained an Overweight rating, urging investors to keep Muse's adoption rates in perspective. Deutsche Bank said Muse and other recent launches position Meta "at the start of a rich product cycle."

Of the 19 analysts tracked by Visible Alpha, 18 recommend buying the stock and one is neutral. The mean price target stands at $881, nearly 27% above Tuesday's close.

When the results land, the disclosures most likely to draw scrutiny sit on the spending side of the ledger: any revision to Meta's expense or capital-spending outlook and fresh Muse adoption data — the same variables behind the stock's rally and pullback over the past month. With a 16-quarter streak of revenue beats already in hand, the revenue line is the least contested number in this report.

This article originally appeared on CoinCentral.