Key Highlights

  • Meta fell 1.53% to $614.99 on October 30, 2026.
  • Third-quarter Revenue rose 26% to $64.60 billion, ahead of expectations.
  • Meta priced a $25 billion common stock offering at $625 a share.
  • Free Cash Flow turned negative at about $2.12 billion last quarter.

Why did Meta Platforms (NASDAQ:META) land among the most actively traded US stocks on Friday? The answer has less to do with anything Meta said that day than with the market around it. Shares fell 1.53% to $614.99 as investors dumped technology stocks after Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC) reignited worries about the cost of the artificial intelligence buildout. Meta's share count was actually a little below its normal level, with a relative Volume of 0.88 according to market data, but at a price above $600 even ordinary turnover adds up to a very large dollar value, which is what puts the stock near the top of a list ranked by price times volume.

A rough day for tech

Friday's session was a punishing one for growth stocks. The Nasdaq-100 dropped 3.46% and the S&P 500 lost 1.82%, according to a closing market summary, while the Philadelphia Semiconductor index sank 7.2%. Intel plunged almost 29% after a weak fourth-quarter outlook, and Amazon reported a sharp cash outflow and signaled higher Capital spending next year. Market reports said the two companies had raised concerns about rising AI buildout costs and how long it will take for that spending to pay off. The same reports noted that the communication services sector, where Meta sits, was headed for its worst month since April 2022.

That backdrop matters for Meta because it is one of the heaviest spenders in the AI race. Investors who are questioning the payback on Data Center Investment at Amazon, Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) are asking the same question about Meta, and on Friday they marked down the whole group together.

A fresh Supply of shares

There is also a stock-specific overhang. On October 27 Meta priced a $25 billion common stock offering at $625 a share, upsized from $22.5 billion, alongside about $12.5 billion of 6.50% mandatory convertible preferred stock, according to the company's announcement. The common shares were sold through forward sale agreements with Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS), which means Meta does not expect to receive the cash until it settles the agreements, on or before November 19, 2027. Both offerings were expected to close on October 29.

Market reports said the stock fell 1.66% to $620.08 on the day the pricing was announced. Friday's close left the shares about 1.6% below the $625 offering price, a level some investors watch as a reference point after a large deal.

What Meta does

Meta owns Facebook, Instagram, WhatsApp and Messenger. Together they reached an average of 3.64 billion daily active people in September, up 3% from a year earlier. Almost all of the company's revenue comes from Advertising sold across those apps. Its Reality Labs division builds virtual and Augmented Reality hardware and software and continues to lose money. The company is also pushing hard into AI, including a personal AI agent called Muse that launched in August.

Results and guidance

Meta reported third-quarter results on October 21. Revenue rose 26% to $64.60 billion, ahead of the $63.34 billion analysts expected, according to market reports. Ad impressions grew 10% and the average price per ad rose 14%. Net Income was $9.86 billion, or $3.83 a share. That figure includes a $9.89 billion charge tied to a multistate settlement with attorneys general over teen mental health litigation. Excluding the charge, Meta said Earnings would have been $7.40 a share. Operating Margin fell to 20% from 40% a year earlier.

For the fourth quarter Meta guided revenue to $73 billion to $76 billion. It narrowed its 2026 Capital Expenditure range to $135 billion to $145 billion and raised its full-year expense outlook to $175 billion to $179 billion to include the legal charge. It gave no 2027 revenue forecast but said it expects strong revenue growth to continue and will keep investing aggressively. Third-quarter capital spending of $34.91 billion outran Operating Cash Flow of $32.79 billion, leaving free cash flow negative at about $2.12 billion. "Our investments are paying off, the core Business is strong, and we're seeing velocity across the board," chief executive Mark Zuckerberg said in the release.

The board also approved a new class of non-voting Class C shares, to be distributed as a one-for-one stock dividend. Meta expects that to function like a two-for-one split for Class A holders, with an intended effective date of January 19, 2027.

Valuation

At $614.99, Meta trades at about 21 times trailing earnings, based on market data. That is cheaper than Microsoft at about 27 times and roughly in line with Amazon at about 19 times, but well above Alphabet, which market data shows at about 14.5 times. A Market Analysis published on October 30 put Meta at 21 times forward earnings, calling that "not the most expensive" but "far from cheap." Market data lists an average analyst price target of $833.12, with the large majority of covering analysts rating the stock a buy.

The bull case

Supporters point to a core ad business that is still growing at more than 25% a year at enormous scale, with pricing power showing up in the 14% gain in average ad price. They argue that AI is improving ad targeting and conversion, and that early traction for Muse, which Zuckerberg said has more than 10 million account holders in the US and Canada, could open new revenue lines. Funding part of the buildout with Equity rather than Debt also gives Meta flexibility if interest rates stay high.

The bear case

Skeptics focus on the cash. Free cash flow turned negative last quarter, operating margin halved, and the company is now selling stock to keep up with its own spending plans. The equity raise adds dilution, and the mandatory convertible will add more shares in 2029. Legal costs are another drag: beyond the settlement charge, market reports said a judge ordered Meta to pay New Mexico $25 billion in a separate privacy case. Reality Labs is still expected to lose $18 billion to $19 billion this year.

The $625 Level and 2027 Spending

Investors will watch whether the stock holds around the $625 offering price, whether the broader AI selloff deepens, and any early signal on 2027 capital spending, which management has so far declined to quantify. The January Class C distribution is the next scheduled corporate event, and fourth-quarter results will show whether ad growth can keep pace with the company's rising costs.