Meta Platforms (NASDAQ:META) will be among several of the tech giants stepping up to the earnings plate next week with the social media behemoth slated to announce Q3 results on Wednesday (October 29).
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Looking ahead to the print, Truist analyst Youssef Squali points out that year-to-date, META has outperformed his covered stocks, rising 25% compared with a 22% gain for the firm’s Truist Securities Internet Index and 14% for the S&P 500. “It remains one of our favorite names, driven by AI improvements unlocking better ranking and recommendation models, which is helping improve targeting and ad efficiency, and drive spend on the platform,” the analyst went on to say. “Higher monetization of Threads and WhatsApp should help sustain growth, and we see materially higher contribution from AR/VR products with strength from the Ray-Ban (EssilorLuxottica, ESLOY, NR) initiative.”
As for the Q3 results, Squali expects revenue will be in line with or slightly above his and Street expectations, with total revenue growth of 22% year-over-year, near the high end of the guide of $47.5-$50.5 billion. This would match Meta’s FX-neutral YoY growth of 22% in 2Q25, and improve on the 19% growth seen in 3Q24 (+20% FX-neutral). Squali’s estimate incorporates a 1ppt FX tailwind, which might be conservative, as the analyst thinks FX could provide roughly a 140bps benefit for the quarter.
With AI shaping the narrative these days, during the quarter, there were several announcements and reports of new partnerships, potential acquisitions, and infrastructure initiatives the company is taking to “accelerate its AI progress.” On the partnership front, Meta entered multi-year agreements with Arm Holdings, Google Cloud, and CoreWeave, committing up to $14.2 billion with CoreWeave through 2031. Regarding acquisitions, Meta is reportedly set to acquire chip startup Rivos (according to Reuters), which would help its efforts to develop in-house semiconductor capabilities for AI. Additionally, Meta is investing in new data center expansions to advance its AI roadmap, including the Hyperion campus and a new $1.5 billion facility in Texas, representing the company’s 29th global data center.
Regarding the Q4 guide, the company faces a challenging YoY comp. With revenue growth of 21% in 4Q24 amid “macro uncertainty,” Squali expects management to provide guidance in line with consensus for 4Q25, with revenue at $57.2 billion (+18% YoY). Growth in 4Q24 had accelerated sequentially due to stronger ad pricing and e-commerce performance. Consequently, the analyst sees total revenue growth of 19% in 2025.
All told, Squali maintained a Buy rating on the shares and raised his price target from $800 to $900, implying the stock will gain 23% in the months ahead. (To watch Squali’s track record, click here)
That’s also the prevalent view among Squali’s colleagues; based on a mix of 40 Buys vs. 6 Holds, the analyst consensus rates the stock a Strong Buy. Going by the $877.57 average target, a year from now, shares will be changing hands for a 20% premium. (See Meta stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.