Finance

Will Meta’s Q3 Earnings Ignite a Rally? Analysts See Buying Opportunity Amid AI Concerns

Analysts are optimistic about Meta despite recent stock dips, expecting strong ad results in the upcoming earnings report.

byAndres Castro

October 21, 2025, 4:18 PM

Mark Zuckerberg, the CEO of Facebook, speaks at a press conference against a blue background

Facebook CEO Mark Zuckerberg speaks during a press conference at Viva Technology in Paris, France. By Frederic Legrand - COMEO / Shutterstock.com.

Executive Summary

Wall Street analysts are optimistic about Meta Platforms’ upcoming third-quarter earnings report, viewing recent stock volatility as a buying opportunity despite investor concerns over AI spending and competition.

Analysts from Morgan Stanley and BofA Securities maintain bullish ratings, citing strong advertising trends, accelerating engagement growth, and improved ad targeting as drivers for robust ad dollar growth.

They anticipate Meta will report better-than-expected advertising results and provide strong sales guidance for the fourth quarter, reinforcing confidence in the company’s AI ad engine and long-term AI strategy.

The Story So Far

Meta Platforms has experienced recent stock volatility and investor apprehension concerning the sustainability of its significant AI investments, the positioning of its Llama AI model, and emerging competition from apps like OpenAI’s Sora. Despite these concerns, Wall Street analysts are expressing optimism ahead of the upcoming third-quarter earnings report, believing strong advertising trends and the company’s AI ad engine will drive robust results and alleviate short-term market uncertainty.

Why This Matters

Despite recent stock volatility and investor concerns surrounding AI spending and competition, Wall Street analysts are bullish on Meta Platforms’ upcoming third-quarter earnings. A strong report, driven by robust advertising trends and positive guidance, is anticipated to alleviate investor apprehension, reinforce confidence in Meta’s AI strategy and ad engine, and potentially lead to a significant boost in stock sentiment and continued ad revenue growth.

Who Thinks What?

Wall Street analysts, including those from Morgan Stanley and BofA Securities, are optimistic about Meta Platforms, anticipating strong advertising results and positive sales guidance driven by robust ad dollar growth and an effective AI ad engine, viewing current market uncertainty as a buying opportunity.

Investors have expressed concerns regarding the sustainability of the artificial intelligence boom, the positioning of Meta’s Llama AI model, emerging competition from OpenAI’s Sora video app, and Chief Executive Mark Zuckerberg’s significant investment in AI technology.

Meta Platforms (META) shares have experienced an uneven trading period since reporting strong second-quarter results in late July, with the stock declining approximately 5% from August through September and trading down a fraction in October. Despite these recent pressures, Wall Street analysts are expressing optimism regarding the tech giant’s upcoming third-quarter earnings report, seeing current market uncertainty as a buying opportunity.

Analyst Outlook Ahead of Earnings

Investor concerns have centered on the sustainability of the artificial intelligence (AI) boom, the positioning of Meta’s Llama AI model, and emerging competition from OpenAI’s Sora video app. Chief Executive Mark Zuckerberg’s commitment to investing hundreds of billions in AI technology has also been a point of focus. However, analysts believe these concerns may be overblown in the short term.

Morgan Stanley analyst Brian Nowak reiterated an “overweight” rating and an $850 price target for Meta stock. Nowak noted that “ad conversations remain among the most positive in the space,” predicting accelerating engagement growth and improved ad targeting would drive continued robust ad dollar growth. He anticipates Meta will report better-than-expected advertising results and provide strong sales guidance for the fourth quarter.

BofA Securities analyst Justin Post echoed this bullish sentiment, maintaining a “buy” rating and a $900 price target. Post highlighted “constructive” ad checks and suggested that another quarter of strong ad growth and guidance could reinforce confidence in Meta’s AI ad engine. He also emphasized that Meta’s AI roadmap for 2026 would be crucial for stock sentiment, expecting the company to build optimism around large language model innovation and AI benefits to ad revenues.

Meta Stock Performance and Key Dates

Meta stock traded sideways on the market today, last up a fraction at $732.21. Shares have formed a flat-base pattern with a buy point of $796.25, according to IBD MarketSurge. The stock recently climbed back over its 21-day moving average with a 2% gain.

Meta holds a strong IBD Composite Rating of 96 out of a possible 99, indicating its position among top growth stocks. The company is scheduled to release its third-quarter results after market close on October 29.

Summary

Despite recent stock volatility and investor apprehension regarding AI spending and competitive threats, analysts from Morgan Stanley and BofA Securities maintain a bullish stance on Meta Platforms. Their optimism is primarily driven by strong advertising trends and expectations for a positive third-quarter earnings report, which they believe could alleviate concerns and reinforce confidence in Meta’s AI strategy and ad revenue growth.