Meta's Muse AI Momentum Wins Over Analysts — But $140B Spending Outlook Raises Funding Questions

• Six firms raised Meta's price targets following its third-quarter results, citing stronger advertising performance and early adoption of the Muse AI agent.
• Faster Muse monetization could lift 2027 and 2028 revenue forecasts, said UBS.
• Meta's fourth-quarter revenue guidance was $1 billion above JPMorgan’s expectations at the high end.

Meta Platforms (META) drew mixed price-target revisions from the Street on Thursday as analysts welcomed early momentum in its Muse artificial intelligence (AI) products but questioned how the company would finance its expanding infrastructure investments.

The Facebook parent raised its 2026 capital expenditure outlook's lower end to $135 billion from $130 billion on Wednesday, putting its spending midpoint at $140 billion.  

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The company also announced plans to create a new class of nonvoting shares to support future capital raising. As of this writing, META stock was trading nearly 2% down in premarket trading and was among the top trending tickers on Stocktwits.

Analysts See Upside From Meta Muse, Advertising Growth

Barclays said Muse was off to a strong start and called it a “game changer” for Meta's investment narrative. The firm described Meta as one of the few mega-cap companies participating in AI while remaining insulated from AI labs, according to The Fly.

Citi said Meta was entering an “AI product super-cycle” with multiple monetization opportunities, while UBS noted that AI investments were already strengthening advertising performance and product adoption. Faster Muse monetization could lift 2027 and 2028 revenue forecasts, it added.

JPMorgan highlighted AI-driven advertising improvements, video growth and early momentum across Muse Wonder, Meta Model API and Muse Code, per TheFly. The firm said Meta's fourth-quarter revenue guidance was $1 billion above its expectations at the high end.

DA Davidson highlighted management's plans to scale Muse through additional computing investments, while BofA said greater clarity around Muse's business model and its one-billion-user target could strengthen confidence in the opportunity.

Meta's AI Spending, Financing Remain Key Concerns

TD Cowen said Meta delivered a solid third-quarter earnings beat excluding the settlement charge but expects the company to issue equity or debt to finance its AI infrastructure expansion over the coming years.

Wells Fargo highlighted Meta's fastest U.S. and Canada advertising growth since the second quarter of 2021 and said management's 2027 revenue commentary could lift consensus estimates by one to two percentage points. 

However, it flagged uncertainty around capital raising and Meta's 2027 operating expenses and capital expenditures.

Piper Sandler cited encouraging early Muse user retention and commercial intent, alongside management's expectation of improving computing cost efficiency by more than tenfold next year. The firm raised its revenue estimates but also increased its 2027 operating expense and capital expenditure forecasts to reflect Muse and broader AI investments.

What Meta Reported In Q3 Earnings

Meta's third-quarter (Q3) revenue rose 26% year over year to $64.60 billion, exceeding Wall Street estimates of approximately $63.34 billion. The firm reported earnings per share (EPS) of $3.83, including a $9.89 billion legal settlement charge. 

Excluding the charge and its tax impact, earnings would have been $7.40 per share. The company projected fourth-quarter revenue of $73 billion to $76 billion.

What Retail Investors Think Of META Stock

On Stocktwits, retail investors’ sentiment around META stock flipped to ‘bullish’ from ‘bearish’ a day ago amid high message volume. 

So far this year, Meta shares have risen over 7%. By comparison, the Vanguard Morningstar Growth ETF (VUG) and the Invesco NASDAQ 100 ETF (QQQM), which hold the stock, have risen around 10% and 18%, respectively, over the same period.

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