Key takeaways
- Meta stock surged in after-hours trading after the company reported Q3 revenue of $64.6 billion
- Meta announced plans for an effective 2-for-1 stock split in January 2027
- Meta raised its 2026 AI spending forecast to as much as $145 billion
Meta stock jumped in after-hours trading on Wednesday after the Facebook parent reported stronger-than-expected third-quarter 2026 earnings, announced a new share structure and revealed impressive growth in its artificial intelligence business.
Shares of Meta Platforms closed the regular trading session at approximately $697.52, up 0.47%, before climbing around 3% after the earnings announcement. Some reports recorded gains of as much as 7% during extended trading.
Meta Earnings Beat Wall Street Expectations
Meta reported third-quarter revenue of $64.60 billion, which was a 26% increase from the previous year and exceeded analysts' expectations of approximately $63.33 billion. Net income reached $9.86 billion, compared with $2.71 billion a year earlier, while earnings per share increased to $3.83.
(Source: investor.atmeta.com)
However, the results included a $9.89 billion charge related to a settlement with US state attorneys general over allegations concerning social media's impact on teenagers' mental health. Excluding the charge, earnings per share would have reached $7.40.
Advertising was Meta's primary revenue driver, and generated approximately $63.06 billion during the quarter. Ad impressions increased 10%, while average advertising prices climbed 14%.
Zuckerberg Unveils Major AI Plans as Meta Stock Climbs
Meta CEO Mark Zuckerberg pointed out the growing adoption of the company's Muse AI agent, which attracted more than 10 million users across the United States and Canada since launching in September. The company is now positioning AI as a major growth opportunity alongside its established advertising business.
Meta also announced plans to introduce a new Class C nonvoting stock in January of 2027, effectively creating a 2-for-1 stock split while allowing Zuckerberg to maintain voting control.
The move could provide some more flexibility to finance acquisitions and support Meta's ambitious AI expansion plans.
Meta Raises AI Spending Forecast Despite Strong Results
Despite its impressive revenue growth, Meta's aggressive AI investments continue to pressure cash flow. Capital expenditures reached $34.91 billion during the third quarter, while the company increased its full-year spending forecast to between $135 billion and $145 billion. Free cash flow also turned negative at $2.12 billion.
Nevertheless, Meta expects fourth-quarter revenue of between $73 billion and $76 billion, with the midpoint exceeding Wall Street expectations.
The stronger outlook, accelerating AI adoption and resilient advertising business all helped lift Meta shares after the announcement. However, investors will be watching whether Zuckerberg's substantial AI spending ultimately translates into sustainable earnings growth.
