Meta Stock Dips Despite Strong Q3 Results: Is It a Buy?

fool.com — October 27, 2026 at 07:01 PM UTC

Meta Platforms stock fell despite reporting strong third-quarter results, with revenue up 26% to $64.6 billion and better-than-expected guidance for the current quarter. The decline follows investor concerns over heavy AI spending that drove free cash flow to negative $2.1 billion. The company took a $9.9 billion legal charge related to social media mental health litigation, though adjusted operating income rose 12% to $22.9 billion. Capital expenditures nearly doubled to $34.9 billion year-over-year, reflecting Meta's aggressive investment in artificial intelligence infrastructure. The stock trades at a forward price-to-earnings multiple of 18, below the S&P 500 average of 19, and is down about 20% from its high. CEO Mark Zuckerberg defended the spending, saying investments are paying off, while the company launched its new AI agent, Muse, in September.

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