Meta Platforms (META) shares slipped 0.55% in the latest session as investors await the company's third-quarter results, due Wednesday, Oct. 21, after the market close. The stock has climbed about 9% this year by Morningstar's count, while TipRanks measures the year-to-date gain at 7.2%. Attention now turns to Wednesday's report, with Muse adoption and capital spending expected to be in focus. Together, the two items frame the quarter's core question: how quickly newer AI products such as Muse convert adoption into revenue, set against a capital-spending pace that is already expected to push free cash flow negative.

What Analysts Expect

Wall Street forecasts third-quarter earnings of $6.66 per share on revenue of $63.34 billion, an increase of roughly 24% year over year. Those consensus figures serve as the benchmark against which Wednesday's actual results will be measured.

Morgan Stanley analyst Brian Nowak maintained a Buy rating and lifted his price target on the stock to $820 from $775, a $45 increase. The new target implies about 15% upside, while the average Wall Street target of $832.58 points to roughly 18%.

Nowak expects stronger core advertising and AI subscription products to raise his 2027 and 2028 GAAP EPS estimates by 1% and 3%, respectively. He also lifted his 2027 and 2028 revenue forecasts by 1% and 2%, citing solid advertising trends and improved return on ad spend from AI-driven ad products.

His payments and other revenue estimates rose by $1 billion for 2027 and $2 billion for 2028, a change he ties to high-margin Muse and business AI subscriptions. Higher costs offset part of that benefit: his total expense forecasts increase by 1% in both years, driven by Enterprise Platform sales efforts.

Deutsche Bank analyst Benjamin Black also kept a Buy rating with an $820 target. His channel checks show core advertising remains solid, helped by higher engagement. Black raised his third-quarter revenue estimate to $63.7 billion from $63.1 billion and expects Muse monetization to build as the product expands.

Among analysts tracked by TipRanks, 39 rate the stock a Buy and six rate it a Hold, producing a Strong Buy consensus. Morningstar is more reserved: the research firm rates the stock three stars — a mid-scale grade on its one-to-five system that signals a market price close to the firm's fair value estimate — pegs that fair value at $850, and considers the shares fairly valued at current levels. The split reflects the differing methods behind sell-side price targets and independent fair-value estimates.

What to Watch in the Report

Morningstar identifies Muse agent adoption as the top item for investors. It is looking for details on usage and engagement trends, as well as Meta's plans to make money from the product. The usage and engagement figures will offer a fresh read on whether the subscription revenue analysts are now baking into their models is taking shape.

Meta has landed near the top of its guided revenue range in each of the past two quarters. Repeating that performance would put quarterly revenue near $63.8 billion — and would extend a stretch in which the company's own guidance has been a dependable marker for the actual print.

Full-year capital expenditures are guided to a range of $130 billion to $145 billion. That works out to $40 billion to $47 billion per in the second half of the year, and free cash flow will probably turn negative as a result. Free cash flow — the cash a company has left after operating costs and capital investments — turning negative means capital outlays are exceeding the cash generated by operations, a trade-off investors can follow line by line in the cash-flow statement.

Morningstar will also listen for any commentary on 2027 capital spending. Last quarter, Meta's CFO spoke about "flexibility" on that front, which Morningstar reads as a dodge. The firm is watching for a signed agreement to sell compute to an outside customer — a deal that would open a revenue channel beyond Meta's own products — and any new legal charges on top of the $2.4 billion recorded in the second quarter would also draw attention.

For comparison, Meta posted GAAP EPS of $1.05 in the year-ago quarter. Adjusted EPS came in at $7.25, excluding a one-time tax charge. The wide gap between the two figures stems from that charge rather than underlying operations — a distinction worth keeping in mind when Wednesday's GAAP and adjusted numbers arrive.