Meta Platforms Inc. (META) is drawing bullish analyst views ahead of its third-quarter earnings report Wednesday, as Wall Street sees growing opportunities in artificial intelligence, advertising and the company's new Muse AI agent.
The company is scheduled to release its third-quarter 2026 financial results after the market closes on Oct. 21.
Analysts expect earnings of $5.89 per share, down from $7.25 a year earlier. Revenue is projected to rise to $63.36 billion from $51.24 billion in the year-ago quarter.
Ahead of Meta's earnings report, Rosenblatt Securities and Citizens JMP Securities maintained bullish ratings on the company, with price forecasts of $886 and $885, respectively.
Rosenblatt Sees Strong Advertising Growth Ahead
Rosenblatt analyst Barton Crockett maintained a Buy rating and an $886 price forecast, citing Meta's advertising momentum and potential AI-driven growth.
Crockett said Meta's decision to report earnings a week earlier than usual, without issuing preliminary results, suggests management is confident about its performance.
He expects third-quarter revenue growth near the upper end of Meta's 19% to 25% guidance range, supported by AI-driven improvements in advertising engagement and effectiveness.
Rosenblatt projects third-quarter revenue of $63.94 billion, above the $63.36 billion consensus estimate. Adjusted earnings are expected to reach $6.95 per share, according to the firm's estimates.
However, Crockett expects Meta's substantial AI investments to pressure free cash flow. He sees capital spending of $130 billion to $145 billion in 2026 and considers a potential increase toward $200 billion in 2027 reasonable.
Despite those costs, Crockett believes Meta's core advertising improvements can justify its AI investments, with Muse providing additional long-term upside.
Citizens Sees $10 Billion Opportunity in Muse
Citizens JMP Securities analyst Andrew Boone maintained a Market Outperform rating and an $885 price forecast, highlighting Muse's potential to transform consumer AI.
Boone expects consumer AI agents to surpass 100 million daily active users by the end of 2027, with Meta positioned to capture a meaningful share of that market.
He estimates Muse could generate more than $10 billion in annual advertising revenue with 100 million daily users. That potential revenue is not included in his current financial projections.
Boone believes advertising, rather than subscriptions, offers the stronger business model for AI agents as they increasingly help consumers complete tasks, discover products and make purchasing decisions.
He also sees an opportunity for Meta to gain users while OpenAI faces computing constraints and Alphabet Inc.'s (GOOG) Google balances AI innovation against risks to its existing search advertising business.
However, Rosenblatt cautioned that Muse's rapid initial adoption could eventually slow, creating potential stock volatility. The firm also does not expect meaningful Muse monetization for at least another year.
Together, the analyst reports highlight Meta's expanding AI opportunity while underscoring the challenge of turning rising infrastructure spending into sustainable revenue growth.
META Price Action: Meta Platforms shares were down 1.96% at $691.60 at the time of publication on Tuesday, according to market data.
