Meta Platforms enters its third-quarter earnings call on Wednesday with the stock up several percentage points for the year after a two-month rally that erased a 17% deficit. The turn has been driven by the September launch of the Muse AI agent and its Wonder model variants, which gave the company a credible seat at the frontier-model table. The market is now pricing that narrative against a quarter that includes a disclosed $10 billion legal charge and a capital expenditure range that already stretches to $145 billion.
The charge is the known unknown
Analysts expect revenue of $63.34 billion, near the top of Meta’s $61 billion to $64 billion guidance and roughly 23.6% higher than a year ago. Adjusted earnings per share are seen at $6.53, a 5.7% sequential increase from the second quarter’s $6.18 but a 9.9% decline versus the prior year’s comparable figure. The year-over-year drop reflects the $10 billion charge for legal fees tied to a settlement of up to $18 billion with state attorneys general over youth social media concerns. Because the company flagged the expense in advance, buy-side estimates may already incorporate it. Sell-side consensus is less uniform; Bank of America models the quarter at $3.79 a share after the charge.
CapEx leash remains tight
Investors will watch whether Meta widens its 2026 capital expenditure guidance, currently $130 billion to $145 billion. A significant increase would typically spook a market focused on return on invested capital, though the enthusiasm around Muse may grant more latitude than the second quarter allowed. The company does not provide quarterly EPS guidance, so the fourth-quarter revenue outlook, consensus sits at $73.6 billion, implying 23% year-over-year growth, will carry disproportionate weight.
Muse metrics will wait
Muse launched on September 8, too late to move the needle on third-quarter financials. Management may offer early adoption data or strategic detail, but material revenue impact is a later-quarter story. For now, the stock’s re-rating rests on a product cycle that has barely begun and a legal bill that is already quantified.