Weeky forecast: Investors react to Meta rising AI costs and weak EPS
Meta’s stock fell 12% this week, primarily driven by the company’s Q3 earnings report released on October 29. While revenue rose 26% year-over-year to $51.2 billion, surpassing expectations of $49.5 billion, earnings per share (EPS) plunged 83% to $1.05 due to a one-time tax charge of $15.9 billion.
Without this charge, EPS would have been $7.25, exceeding analysts’ forecasts of $6.72. Another negative factor was Meta’s increased capital expenditure forecast for 2025, which rose to $70–72 billion to fund new data center construction. Some analysts criticized this as “higher costs now for uncertain future returns.”
“Investors reward discipline and punish those who overpromise on AI-driven growth,” said Nigel Green, CEO of deVere Group.
Meta shares are currently trading around $648, below key moving averages, with SMA 200 ($648) acting as the nearest resistance level, according to the MA Ribbon indicator. The social media giant now faces a choice: reclaim the bullish momentum or continue its decline.
Waiting for AI profitability proof
Investors are looking for clarity on cost control and AI monetization. Meta is expected to issue reassuring guidance or positive commentary next week about its advertising business growth, spending discipline, or early AI profitability.
Meta daily stock chart. Source: TradingView
If such updates align with positive macroeconomic signals, shares could rebound 5–10% in early November, with a moderate upside to $660–$680.A bearish scenario could involve continued regulatory pressure, advertising demand weakness, or negative macro signals, leading to an additional 5–8% drop.
“If Meta can show that its heavy AI investments are paying off, we could see a 7–9% rebound next week. But renewed concerns about profitability could quickly cause another 6–8% short-term dip,” said analyst Viktoras Karapetians.
Despite challenges, experts agree Meta remains in a strong financial position, supported by a robust business model and competitive advantages. The key task ahead is to prove that declining profitability risks are manageable, not structural.
As we wrote, Meta plunges 11% to $666 as AI bond sale rattles investors and tests key technical support
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