The third-quarter earnings season is gathering pace, with Netflix, Tesla and Meta Platforms among the companies in focus. After results from financial and chip stocks prompted share-price declines, investors are watching corporate earnings, capital spending and AI infrastructure plans for clues about what may drive stocks and market sentiment next.
Tesla earnings due as Roadster draws attention
Tesla is scheduled to report third-quarter results after the U.S. market closes Wednesday. The company recently unveiled a new flying version of its Roadster, nearly a decade after first presenting the concept in 2017.
Chief Executive Elon Musk said some versions could accelerate from 0 to 60 miles per hour in under one second and reach a top speed above 230 mph. The car is also equipped with a miniature rocket system supplied by SpaceX, designed to enable short-distance lifts off the ground. Tesla says production of the model is expected to begin in 2028. The new product has added another point of interest ahead of earnings, though its production timeline and commercial prospects remain to be clarified.
Meta investors weigh AI spending against cash flow
Meta is due to report third-quarter results Wednesday evening. Analysts surveyed by FactSet expect adjusted earnings per share to rise more than 500% year over year to $6.58, while revenue is forecast to increase 24% to $63.3 billion.
Investors are focused not only on quarterly profit but also on what Meta says about future investment in AI infrastructure. In its second-quarter report, the company narrowed its full-year capital expenditure forecast to $130 billion-$145 billion, from a previous range of $125 billion-$145 billion. As Meta continues to invest in AI model training and data centers, free cash flow in the second quarter was $784 million, down sharply from $8.55 billion a year earlier.
The 10-year U.S. Treasury yield reversed sharply earlier this week, adding to volatility in bond markets. A sell-off in CoreWeave bonds also renewed investor attention on the AI infrastructure company's debt load. Spending plans from Meta and other large technology companies could further shape market views on the returns from AI investment and the pressure that funding it may create.
Netflix faces slower growth and leadership changes
Netflix is scheduled to release third-quarter results after Tuesday's market close. Analysts expect earnings per share to rise 40% to 82 cents and revenue to grow 12% to $12.9 billion. That would mark a third consecutive quarter of slowing revenue growth.
Netflix shares came under selling pressure Friday but found support near $70. The company has appointed former Disney executive Peter Rice as its new chief content officer. He is set to replace Bela Bajaria at the end of this month. Netflix has also announced about 1,000 job cuts, roughly 6% of its workforce.
Netflix's subscription cancellation rate remains low relative to the streaming industry, but user growth and engagement are under greater pressure. Total viewing hours were broadly flat in the first half of the year, while overall engagement rose just 2%. To find new sources of growth, Netflix has expanded into live sports and is developing its ad-supported subscription tier and video podcasts.
Bloom Energy and MaxLinear shares retreat ahead of results
Bloom Energy is due to report third-quarter results after Thursday's market close. The company makes solid oxide fuel-cell systems that provide on-site electricity without burning fuel. Its shares have fallen 35% from a recent high, though the valuation remains elevated, at about 124 times trailing earnings and 61 times forward earnings.
The market expects Bloom Energy's full-year earnings to increase 257% this year and a further 86% in 2027. Third-quarter adjusted earnings are forecast at 69 cents a share, up 359% year over year, while revenue is expected to rise 105% to $1.06 billion.
Chip-design company MaxLinear fell 25% this week but remains up nearly 350% year to date. It develops optical interconnect products for data centers, which carry data between GPUs and servers. Analysts expect the company's full-year earnings to increase 465% this year and another 54% in 2027. Third-quarter earnings per share are forecast to rise 298% to 56 cents, with revenue up 70% to $215 million.
Netflix options price in earnings-related volatility
With Netflix shares at about $70.84, a slightly out-of-the-money call option with a $71 strike and an October 23 expiration had a midpoint premium of $3.15 per share, or 4.4% of the stock price. One contract represents 100 Netflix shares, making the premium $315 at that price. If held to expiration, the shares would need to reach $74.15 for the position to cover the premium paid.
Options markets imply a potential move of about $6 in either direction around Netflix's earnings. That estimate is commonly calculated by adding the premiums of at-the-money call and put options with the same strike and expiration. Implied volatility often rises before earnings, which can affect option prices; the actual share-price direction and size of any move will depend on results, guidance and investors' assessment of future growth.