Meta Platforms shares fell for a fourth straight trading session on Monday as investors waited for the Facebook parent to report third-quarter results on Wednesday. The decline came even as artificial intelligence infrastructure stocks broadly rebounded, leaving Meta as an exception among major technology companies. Investors remain focused on the rapid increase in Meta's AI spending and how the company will structure future capital expenditure.
Meta shares briefly fell below $700 in early trading before recovering some ground. The stock was down nearly 1% at $703.23 during the session. It had already fallen below its 21-day moving average on Friday and remained below that short-term technical level on Monday. Amazon, Microsoft and Google parent Alphabet all traded higher, while chip stocks also recovered after last week's losses.
Morgan Stanley raises Meta target to $820
Wall Street's pre-earnings view of Meta remains broadly constructive. Morgan Stanley analyst Brian Nowak raised his price target to $820 from $775 and maintained an overweight rating.
Nowak also warned that operating costs could rise materially as Meta's Muse artificial intelligence agent gains users. He estimates that every additional 100 million Muse users could require 1 to 4 gigawatts of graphics-processing capacity, including Nvidia chips.
He expects Meta to add about 13 gigawatts of total capacity in 2027 and 2028 to support its various AI products and services. In his view, the current AI ecosystem remains constrained by growth requirements: under existing models, expanding any agent-based product to hundreds of millions of users could require a substantial increase in computing capacity.
Investors weigh up to $145 billion in capital spending
Muse's potential demand for data-center power and computing capacity comes as investors are already sensitive to Meta's expanding AI budget. Capital expenditure will be a central focus when the company releases its third-quarter results. Meta has previously committed to spending as much as $145 billion on capital projects this year.
Evercore ISI analyst Mark Mahaney expects Meta to offer qualitative comments or directional guidance on its 2027 spending plans on Wednesday, although he does not expect formal guidance.
Mahaney expects management could indicate that total expense growth in 2027 will be "slightly below" the pace seen in 2026, while capital expenditure growth could remain broadly similar to 2026. He believes Meta's comments on capital spending and total expenses could be more aggressive than current market expectations.
If the company's spending outlook exceeds analysts' current forecasts, investors could lower their estimates for Meta's 2027 earnings. Wednesday's report will therefore provide more than a view of third-quarter performance: it will also help the market assess whether Meta plans to continue expanding its AI infrastructure at a rapid pace, and how much additional computing cost could follow if products such as Muse attract more users.