Meta Earnings Will Provide a Gut Check for Struggling AI Trade

What happened

• Meta reported record third-quarter revenue of $64.2 billion and better-than-expected revenue, while its stock rose about 2.5% in extended trading.
• Meta raised the low end of its 2026 capital-expenditure outlook to $135 billion, keeping the range at $135 billion to $145 billion.
• Meta plans to create nonvoting Class C shares in January 2027, distributed to existing shareholders and intended to help finance growth without affecting Mark Zuckerberg’s voting control.

Why it matters

The results test whether Meta’s advertising business can support its rapidly expanding AI infrastructure spending. The new nonvoting share class also raises important questions for investors and corporate-finance professionals about funding, dilution and founder control.

What to watch. Meta’s new Class C stock is scheduled to take effect in January 2027; investors will also watch whether AI spending produces monetization and whether Meta’s fourth-quarter revenue reaches its $73 billion to $76 billion guidance.

Timeline

1. EarlierOct 19
   Here are Monday's biggest analyst calls: SpaceX, Nvidia, Apple, CoreWeave, Amazon, Meta, Eli Lilly & more
2. First reported by BloombergOct 21
   Meta Earnings Will Provide a Gut Check for Struggling AI Trade
3. CNBC reportsOct 21
   Meta earnings live updates: AI spending, ad revenue and stock reaction
4. Semafor reportsOct 21
   Meta plans nonvoting shares, eyeing more stock sales to fund its AI dreams
5. The Wall Street Journal reportsOct 21
   Meta Will Create New Stock Class to Fund AI Spending
6. Techmeme reportsOct 21
   Meta says it will create a new class of nonvoting stock to raise the capital it needs for developing AI models, with an effective date in January 2027 (Meghan Bobrowsky/Wall Street Journal)
7. Financial Times reportsOct 21
   Meta to create new non-voting share class to enable AI fundraising
8. The Information reportsOct 21
   Meta Creates New Share Class to Pave Way for AI-Related Fundraising
9. The Verge reportsOct 21
   Meta to create a new class of shares to fund AI push
10. Business Insider reportsOct 21
    Meta creates a new stock class to keep Zuckerberg in control
11. TechCrunch reportsOct 21
    Meta wants to pay for its broad AI buildout with a newly created class of stock
12. Decrypt reportsOct 22
    Meta Creates Non-Voting Stock to Fund AI Buildout, Keeping Zuckerberg in Control

Who is involved

Sources (11)

1. BloombergOct 21
   Meta Earnings Will Provide a Gut Check for Struggling AI Trade
2. CNBCOct 21
   Meta earnings live updates: AI spending, ad revenue and stock reaction
3. SemaforOct 21
   Meta plans nonvoting shares, eyeing more stock sales to fund its AI dreams
4. The Wall Street JournalOct 21
   Meta Will Create New Stock Class to Fund AI Spending
5. TechmemeOct 21
   Meta says it will create a new class of nonvoting stock to raise the capital it needs for developing AI models, with an effective date in January 2027 (Meghan Bobrowsky/Wall Street Journal)
6. Financial TimesOct 21
   Meta to create new non-voting share class to enable AI fundraising
7. The InformationOct 21
   Meta Creates New Share Class to Pave Way for AI-Related Fundraising
8. The VergeOct 21
   Meta to create a new class of shares to fund AI push
9. Business InsiderOct 21
   Meta creates a new stock class to keep Zuckerberg in control
10. TechCrunchOct 21
    Meta wants to pay for its broad AI buildout with a newly created class of stock
11. DecryptOct 22
    Meta Creates Non-Voting Stock to Fund AI Buildout, Keeping Zuckerberg in Control

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