Meta Q3 Earnings: All Eyes on AI Spending and Capex as Shares Surge 27% in 2025

 It’s earnings day for Meta Platforms.

The social media powerhouse, one of the major “hyperscalers” driving Wall Street’s AI momentum, is set to unveil its third-quarter financial results after the market closes on Wednesday. Investors are eagerly anticipating insights into the company’s AI investments and future ambitions, which are expected to be the main highlight of the report.

Analysts project Meta’s revenue at around $49.5 billion, with close attention on how the company plans to allocate its capital expenditure (capex) and generate returns from its AI initiatives. Recently, Meta invested $14 billion in Scale AI, signaling its strong intent to advance toward AI superintelligence.

Despite market uncertainties, Wall Street maintains a positive outlook on Meta. Analysts are optimistic about the company’s growth, looking for encouraging signals on AI progress, as well as updates related to advertising performance, Instagram Reels, and hardware devices.

Meta’s full earnings report 2025 is expected shortly after the closing bell, followed by an analyst call at 4:30 p.m. ET to discuss results and outlook.

Meta and OpenAI Battle for AI Video Dominance

The rivalry between Meta and OpenAI is heating up in the short-form AI video space. In September, Meta rolled out its new AI-powered video feed called Vibes, which quickly drew mixed reactions from tech leaders — some dismissing it as “AI slop.” Just days later, OpenAI launched Sora 2, its latest video generation model, along with a dedicated short-form video app.

OpenAI announced that over one million users downloaded the Sora app within five days, while data from Similarweb showed that Meta’s AI app downloads climbed by around 100,000 following the Vibes launch. Analysts expect Meta to share more insights into Vibes’ user engagement during its upcoming earnings call.

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Major Workforce Shifts at Meta

Meta has been undergoing significant headcount changes in recent months. After expanding its superintelligence division with high-value contracts, the company reportedly cut about 600 roles from the same unit. Additional layoffs hit the risk management division, where automation has replaced several manual processes, according to internal memos reviewed by Business Insider.

These reductions follow January’s broader layoffs, when Meta trimmed about 5% of its global workforce—approximately 3,600 employees—citing “low performance.”

Tracking AI vs. Metaverse Mentions

When Facebook rebranded as Meta in 2021, Mark Zuckerberg emphasized a long-term vision centered on the metaverse, investing billions in projects such as Horizon Worlds. However, with shifting trends, AI has taken center stage.

At September’s Meta Connect, the company unveiled an AI tool capable of creating 3D virtual environments from text prompts. Despite speculation, Meta’s CTO Andrew Bosworth recently told employees that the metaverse remains a key company priority, even as resources are restructured internally.

Investors Eye Meta’s AI Spending

Meta’s massive AI investments continue to attract investor attention. CEO Mark Zuckerberg previously said the company could spend up to $72 billion in 2025 on AI infrastructure. Analysts will watch closely to see if this number climbs even higher.

If heavy AI spending begins to pressure Meta’s free cash flow and profit margins, investor confidence could waver. However, strong advertising performance — which still drives most of Meta’s revenue — would give Zuckerberg the flexibility to continue his aggressive AI push.

Analyst Expectations Ahead of Q3 Earnings

DA Davidson analysts are comparing Meta’s performance with that of Alphabet (Google), which reports around the same time. They expect Meta to continue outpacing Google’s ad revenue growth, though at a slower rate due to tougher comparisons from the prior year.

Meanwhile, CFRA Research believes Meta’s upcoming results will meet Wall Street’s high expectations, projecting revenue growth of around 21–22% for Q3. The firm credits Meta’s strong AI initiatives for helping it outperform the broader digital advertising market.

JPMorgan analysts remain bullish on Meta’s AI strategy — particularly improvements in Reels, Ads, and AI-driven engagement tools — while Bank of America notes that investor sentiment will heavily depend on the company’s future AI roadmap and monetization updates.

What Wall Street Expects

According to Bloomberg estimates, Meta’s Q3 numbers are projected as follows:

Revenue: $49.57 billion

Earnings per share (EPS): $6.72

Operating income: $19.47 billion

Operating margin: 39.3%

Ad impressions: +10.8%

Average price per ad: +10.5%

Daily active users (Family of Apps): 3.48 billion

Reality Labs loss: $5.18 billion

For the full year, analysts expect total expenses of $115.6 billion and capital expenditure of nearly $69.3 billion, highlighting Me

ta’s continued push into AI and next-generation digital experiences.