Meta is about to find out whether the market still has patience for its enormous artificial intelligence spending. When the company reports third-quarter results on Wednesday, two things will dominate the conversation: the billions pouring into AI infrastructure and how many people are actually using Muse, its personal assistant.
The stakes are hard to overstate. Meta has committed hundreds of billions of dollars to building out AI capacity, a figure that would have seemed implausible just a few years ago. Capital expenditure more than doubled to roughly $41.68 billion in the September quarter, and analysts expect the company to report a cash burn of around $8.52 billion. That kind of outlay would normally spook investors, but Meta has been given something of a pass because its recent product launches have landed well. The Muse assistant, which offers a subscription tier and can reach into other apps to send emails and make payments, has been received positively, and the latest round of AI models has strengthened confidence that the company can execute.
That confidence matters because Meta is trying to do something genuinely difficult. Advertising still pays the bills, but CEO Mark Zuckerberg has been clear that he wants a second revenue stream, one built on AI products aimed at businesses. The competitive logic is straightforward enough. OpenAI and Anthropic have established early leads in the enterprise AI conversation, and Meta cannot afford to be a spectator in a market it believes will define the next decade of computing.
The advertising business, meanwhile, is holding up better than some feared. BofA analysts noted healthy ad demand in the quarter and said recent AI launches have reinforced their view of Meta’s execution. Morgan Stanley raised its earnings estimates for 2027 and 2028 despite the higher spending, pointing to stronger ad growth and the possibility that new AI products will eventually contribute real revenue. Those are encouraging signals, but they also reveal the tension at the heart of the story: the bullish case rests partly on money that has not yet been made.
The headline numbers will be mixed. Wall Street expects net income to fall about 17 percent to $15.44 billion, weighed down by the spending. Revenue is projected to grow 23.8 percent to $63.42 billion, which is impressive in absolute terms but a slowdown from the roughly 28 percent pace of the previous quarter. Google and TikTok are not standing still, and the competition for attention and ad dollars remains fierce. Meta’s shares have gained about 7 percent this year, trailing the broader market’s roughly 12 percent rise, which suggests investors are cautiously optimistic rather than fully convinced.
What makes this quarter interesting is that it captures a company mid-transition. The old business is still generating enormous cash, the new business is consuming it, and the market is trying to decide how much credit to give for a future that has not arrived yet. Meta has earned some benefit of the doubt through the quality of its recent releases and the durability of its ad platform. But patience is not infinite, and at some point the AI spending will need to show up in the numbers rather than in the narrative. Whether that happens on Wednesday or several quarters from now is the question nobody can answer with confidence. For now, the company is asking investors to trust the direction of travel, and investors seem willing to do so, if only just.
