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Meta's AI spending, Muse assistant adoption in focus for quarterly results - Finance news and analysis from Global Banking & Finance Review
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Meta's AI spending, Muse assistant adoption in focus for quarterly results

Published by Global Banking & Finance Review

Posted on October 20, 2026

2 min read

· Last updated: October 20, 2026

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Meta’s Q3 Results Spotlight AI Spending and Muse Assistant Adoption

Meta’s Third-Quarter Performance and AI Strategy

Focus on Artificial Intelligence Investments

Oct 20 (Reuters) - Meta's massive artificial intelligence outlays and adoption of its Muse personal assistant will be in focus when it reports third-quarter results on Wednesday, as the social media firm seeks to show that its AI investments can sustain growth.

The company has rolled out several AI products and services targeting businesses as CEO Mark Zuckerberg looks to create a new revenue stream beyond advertising to compete better in the AI race with OpenAI and Anthropic.

Positive Reception and Investor Confidence

• Positive reception for Meta's Muse assistant, which offers subscriptions, and its latest AI models have boosted investor confidence in the company's AI strategy, as Meta commits hundreds of billions of dollars to expanding its AI infrastructure

• "Recent AI launches have strengthened confidence in the company's AI execution," BofA Global Research analysts said, adding that its survey also suggests healthy ad demand in the quarter

Financial Metrics and Analyst Estimates

Capital Expenditure and Cash Flow

• Analysts estimate Meta's capital expenditure more than doubled to $41.68 billion in the September quarter, according to Visible Alpha data

• The rising spending had squeezed its free cash flow in the second quarter and analysts expect it to report a cash burn of $8.52 billion in the third quarter

Earnings and Revenue Projections

• Morgan Stanley analysts raised their earnings estimates for 2027 and 2028 for Meta despite higher spending, citing stronger ad growth and the potential for new AI products to generate additional revenue

• Wall Street expects Meta to report a decline of about 17% in net income to $15.44 billion, according to data compiled by LSEG

• Meta is set to report revenue growth of 23.8% to $63.42 billion, slowing from about 28% in the previous quarter amid intense competition from Google and TikTok

• Shares of the company have gained about 7% this year, underperforming a roughly 12% rise in the benchmark S&P 500

Reporting and Editorial Credits

(Reporting by Jaspreet Singh in Bengaluru; Editing by Devika Syamnath)

Key Takeaways

  • Meta’s Muse AI assistant has surpassed 6.6 million downloads and 1.8 million daily active users since launching in early September, with Citigroup projecting it could generate over $27 billion in revenue by 2030 (investing.com).
  • Analysts estimate Meta’s Q3 capital expenditure more than doubled, squeezing free cash flow and potentially resulting in an $8.52 billion cash burn in the quarter (spglobal.com).
  • Investor confidence is rising: Morgan Stanley has lifted its 2027–28 earnings forecasts, while BofA notes strong ad demand and execution on AI, signaling relief amid the heavy spending (investing.com).

References

Frequently Asked Questions

What is the significance of Meta's AI spending in its Q3 results?
Meta's massive AI outlays are central to its Q3 results, as the company aims to show these investments can sustain business growth beyond advertising.
How has the Muse personal assistant impacted Meta's business strategy?
Positive adoption of the Muse assistant has boosted investor confidence and supports Meta’s effort to diversify revenue streams through AI.
What were Meta's capital expenditures in the September quarter?
Analysts estimated Meta's capital expenditure more than doubled to $41.68 billion in the September quarter.
How did Meta's increased spending affect its cash flow?
Rising AI spending squeezed Meta’s free cash flow, with analysts expecting a cash burn of $8.52 billion in Q3.
What are analysts’ expectations for Meta's Q3 financial performance?
Wall Street expects Meta's net income to decline by about 17% to $15.44 billion, while revenue is expected to grow 23.8% to $63.42 billion.

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