Meta Q3: Non-Recurring Charge Hit GAAP Earnings, Q4 Capex Will Jump Sharply

What happened: Meta Platforms, Inc. shares fell 10% after Q3 results, with operating income down 37% YoY, largely due to a $9.89 billion litigation charge. The author calls the drop overdone. Key numbers: Operating income fell 37% YoY. $9.89 billion litigation charge. 10% post-Q3 stock drop. 21x forward P/E, 4% below its 5-year average. Why it matters: The author argues earnings were distorted by a non-recurring expense and that capex concerns are overblown, since forward opex guidance implies no incremental cost pressure in 4Q FY2026. Ad revenue remains robust on AI monetization.

Meta Platforms, Inc. shares fell 10% after Q3 results, with operating income down 37% YoY, largely due to a $9.89 billion litigation charge. The author calls the drop overdone.

The author argues earnings were distorted by a non-recurring expense and that capex concerns are overblown, since forward opex guidance implies no incremental cost pressure in 4Q FY2026. Ad revenue remains robust on AI monetization.