PREVIEW: Meta gains as investors eye AI spending

Meta Platforms

Yesterday 19:46

        ** Meta Platforms META.O shares gaining 1.9% to $707.37 on Weds ahead of qtrly results, due after the bell, with investors focused on the financial impact of its AI spending push
** The owner of Facebook is expected to report a 24% rise in qtrly rev to $63.37 bln, while adj EPS is seen at $5.75 vs $7.25 a yr ago, per LSEG
** Evercore ISI analyst Mark Mahaney wrote in a note with other analysts that Wall Street's Q3 estimates for Meta are reasonable and said: "META continues to screen as one of the strongest large-platform beneficiaries of performance-budget consolidation, with checks showing sequentially improving spend, ROI, and share." Evercore has an "outperform" rating on the stock.
** In Q2, Meta reported a 91% drop in free cash flow and raised the lower end of its capex forecast for 2026, fueling concerns about its costly AI investments
** Ahead of the results, investors are also digesting news on Meta Weds that a judge in New Mexico ordered the co to pay $25 bln after a jury found the co had misled consumers in a case arising from allegations that a political consulting firm involved in Donald Trump's 2016 presidential campaign obtained data from ‌millions of Facebook users without their consent
** Overall, analyst ratings include 56 "strong buy" or "buy" ratings, 6 "hold" ratings and 1 "sell" rating, based on LSEG data
** Shares have climbed about 7% YTD, underperforming the Nasdaq's .IXIC roughly 15% gain
     

(Reporting by Caroline Valetkevitch )
((caroline.valetkevitch@thomsonreuters.com))