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Meta’s Earnings Per Share Were $3.83 but the Real Figure Tells a Surprising Story

Meta shares fell 7.28% as traders weighed Q3 revenue, a new nonvoting stock class, higher AI spending plans, and legal costs.

By Damilola Esebame, CFEI® , Edited by Laura Hohenstein

Updated Oct. 22, 2026

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Meta Platforms (NASDAQ: META) shares traded near $646.73 in Thursday afternoon trading, down $50.79, or 7.28%, from the previous close of $697.52. Swings of that magnitude can reshape a portfolio's financial fitness in a single session, making earnings season a critical window for tech-heavy investors.

The stock opened at $689.69 and touched a low of $644.30 as traders weighed better-than-expected third-quarter revenue against a new nonvoting stock class and a higher AI spending forecast.

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The drop is steep

The day's high was $689.69, matching the open, and the low was $644.30. That left shares near the bottom of the session range by early afternoon. The move marked a sharp reversal from the previous close of $697.52.

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Revenue topped estimates

Meta reported $64.60 billion in third-quarter revenue, topping LSEG-compiled estimates of $63.37 billion. Meta projected fourth-quarter revenue of $73 billion to $76 billion, compared with LSEG-compiled estimates of $73.73 billion. The figures kept attention on advertising demand even as investors weighed spending growth.

A split is coming

Meta plans to create nonvoting Class C common shares in January 2027, a move that effectively creates a two-for-one split. Nonvoting shares do not carry a say in corporate votes. The structure is intended to help fund AI expansion, acquisitions, and talent retention while preserving CEO Mark Zuckerberg's voting control.

AI spending rises

Meta now expects capital expenditures of $135 billion to $145 billion this year, up from a prior $130 billion to $145 billion range. Capital expenditures are money spent on long-lived assets such as data centers, servers, and chips.

The increased lower end highlights the scale of the company's AI buildout. Meta has been pouring money into advanced chips and data centers to compete more aggressively with OpenAI and Anthropic.

Earnings had charges

Meta posted diluted earnings per share of $3.83 for the quarter. The figure would have been $7.40 without a $9.89 billion charge tied to an August agreement with U.S. state attorneys general over teen mental health and social media litigation. That gap helped make the headline profit number harder to compare with underlying operating performance.

Free cash flow flipped

Meta reported a free cash flow deficit of $2.12 billion in the third quarter, compared with positive free cash flow of $10.63 billion a year earlier. Free cash flow is the money left after operations and capital spending. A deficit means those outflows exceeded incoming cash during the period, putting more attention on funding choices.

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Legal risk remains

A New Mexico judge ordered a $25 billion penalty after a jury found Meta misled residents about data sharing and policies on hate speech and misinformation. The case was tied to the Cambridge Analytica data scandal and adds to the company's privacy and safety overhang.

In August, Meta agreed to pay as much as $18 billion over a decade and restrict teenagers' use of Facebook and Instagram to settle claims by nearly all U.S. states.

Bottom line

Meta is under pressure in Thursday trading even after posting better-than-expected revenue and an above-estimate fourth-quarter sales outlook. The earnings beat may tempt newcomers ready to start investing in Big Tech on the dip, but the details behind the numbers paint a more complicated picture.

The market is focused on whether AI spending, new stock issuance, cash flow pressure, and legal costs will shape the next phase of the company's growth story.

This article is for informational purposes only and should not be considered investment advice.

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