Meta set to report Q3 earnings after the bell

Meta is slated to report third-quarter earnings on Wednesday after the close of regular trading.

Here's what analysts polled by LSEG are expecting:

• Earnings per share: $5.25
• Revenue: $40.29 billion

Meta shares are up almost 70% this year and trading near a record, boosted by a string of strong earnings reports. The company's gains on Wall Street have benefited Meta CEO Mark Zuckerberg, who earlier in October surpassed Amazon founder Jeff Bezos as the world's second-richest person for the first time, according to the Bloomberg Billionaires Index.

Zuckerberg has been pointing to Meta's massive investments into artificial intelligence, which includes spending billions of dollars on Nvidia's popular graphics processing units, as helping improve the company's core online ad business in the aftermath of Apple's 2021 iOS privacy update.

With Meta in July reporting its fourth straight quarter of sales growth above 20%, investors remain optimistic about the company's overall financial health. Bernstein analysts said in a research note last week that Meta replaced Alphabet as the firm's "set-it-and-forget-it blue chip holding" because of the company's "healthy core business" and its low-risk AI strategy.

Meta's results come a day after digital ad companies Alphabet, Reddit and Snap all reported solid quarterly earnings. Microsoft reports after the bell on Wednesday, and the big week for tech earnings wraps up on Thursday, when Apple and Amazon report quarterly financials.

One possible concern for Meta could be slowing revenue growth.

If Meta hits analysts' expectations for third-quarter revenue, that would represent 18% year-over-year growth, down from 23% a year ago. At that time, Meta was heavily benefiting from the massive digital ad spending from China-linked retailers like Temu and Shein, and it's unclear how long those companies will continue their digital marketing blitzes.

In February, Meta reported fourth-quarter revenue that was up 25% year-over-year, and in April, the company's first-quarter revenue was up 27% from a year earlier. Besting those marks will be a "tough bar" for the company, said Angelo Zino, vice president and technology equity research analyst at CFRA. Investors will be eager to see guidance.

"You kind of look at that and you wonder, is that going to be sustained?" Zino said.

Meanwhile, Meta continues investing heavily in its Reality Labs hardware division. The company's strong online advertising business and previous rounds of major layoffs in 2022 and 2023 have helped quell the concerns of anxious investors, but Reality Labs' expenses of $4.8 billion in the second quarter dwarfed the $353 million it generated in sales.  

Zuckerberg's showcase of the company's Orion AR prototype AR glasses in September was viewed as a success by his employees, and Meta plans to court software developers in 2025 as it works toward a consumer version of the headset, CNBC reported earlier this month.

The excitement and buzz around Meta's prototype Orion AR glasses and how they fit into the company's long-term strategy seems to have eclipsed that of Apple and its competing Vision Pro VR headset, which debuted early this year at a starting price of $3,500, said Barton Crockett, managing director and senior research analyst at Rosenblatt Securities.

"The Orion shows a vision that's interesting, and they've executed a lot better than Apple, which is something that nobody would have believed was possible," Crockett said.

Meta also hopes to build off the excitement of its Ray-Ban Meta smart glasses, which it develops in partnership with EssilorLuxottica. Crockett noted that because of the positive reaction to the Ray-Ban Meta glasses, those devices "could be a popular gift this Christmas."