Business and economy·October 28, 2026, 06:02

Meta beat expectations, but the stock still fell almost 7 percent

AI-generated from the sources listed, with automated source checks.

Meta delivered higher-than-expected revenue in the third quarter, but the bill for its AI push and plans for new shares sent investors selling. The drop spread to the rest of the tech sector.

Meta's third-quarter 2026 earnings looked good on paper. Revenue came in at $64.60 billion, up 26 percent from a year earlier and above analysts' expectations of around $63.3 billion. Even so, the stock closed at $648.85 on October 22, a drop of 6.98 percent.

The figures come from media outlets reporting on the earnings, not from Meta's own announcement.

Profit and costs

Net income was $9.86 billion, compared with $2.71 billion a year earlier. The result was weighed down by a one-time charge of $9.89 billion for a legal settlement. The quarter's costs rose 68 percent to $51.61 billion, including the settlement.

Meta also said that daily users across its family of apps reached 3.64 billion (up 3 percent), and that its AI agent Muse has more than 10 million accounts in the US and Canada. CEO Mark Zuckerberg said: "Our investments are paying off, the core business is strong, and we're seeing velocity across the board."

Why did investors get nervous?

Meta narrowed its 2026 forecast for investments in areas such as data centers (capital expenditures) to $135-145 billion. According to one of the sources, the range was previously $130-145 billion. No specific estimate has been given for 2027, but according to one source, Meta signaled continued aggressive investment.

At the same time, Meta plans to introduce a new class of non-voting shares (Class C) along with a one-for-two stock split. According to one source, an independent board committee warned that borrowing on the intended scale could harm Meta's credit rating. Long-term debt rose to $80.92 billion from $58.74 billion a year earlier, while Meta held $82.45 billion in cash and securities.

According to Finimize, the market pointed to larger capital commitments, possible dilution from new shares and lower cash flow per share. The big question was whether the AI investments can generate a return.

Spillover to others

Trading volume in Meta stock was 91 percent above the 30-day average. The same day, the Nasdaq Composite fell 2.60 percent, Nvidia 4.40 percent and Amazon 4.57 percent. Investors moved money into US government bonds, and the 10-year yield fell to 4.95 percent.

Meta expects revenue of $73-76 billion in the fourth quarter, with the midpoint above the consensus of about $73.65 billion. That is an expectation, however, not a result.

The size of the drop is reported differently across the sources. The closing price gave 6.98 percent, while another source cites 5-6 percent, which may be due to different points in time.