Meta Platforms and Tesla both report third-quarter results after the US market closes on Wednesday — a double-header that will test whether Big Tech’s colossal AI investments are starting to pay off, or merely deepening investor skepticism.
Meta is expected to post earnings of about $6.67 a share on revenue of roughly $63.3 billion, up around 24% year over year, according to FactSet. The real focus is spending: Meta has guided to $130-145 billion in 2026 capital expenditures, and in Q2 just $784 million of free cash flow remained after $31.1 billion of spending — triggering a 7% after-hours selloff last time.
Tesla’s margins in the spotlight
Tesla is projected to earn $0.45 a share on about $27.9 billion of revenue. The company has already confirmed 486,500 vehicle deliveries — above analyst estimates — plus 13.7 GWh of energy storage deployed and 464,400 vehicles produced. With hardware figures known, attention shifts to profit margins, cash flow and how aggressively Tesla will fund its robotaxi, Optimus robot and AI efforts.
The report lands a day after Musk confirmed both Tesla and SpaceX have formed committees to explore a merger — his first Tesla earnings call since that disclosure, at 5:30 p.m. ET. Meta’s call starts at 4:30 p.m. ET.
Why it matters beyond tech
AI doubts are already weighing on the sector: the Nasdaq slipped Tuesday even as the Dow jumped 530 points on strong earnings elsewhere. Options traders are pricing a 6% post-earnings move for Meta. Analysts warn the reaction could set the tone for risk assets broadly — including crypto — into week’s end.
With 70 S&P 500 companies reporting this week and the Fed deciding October 28, Wednesday’s double bill is the pivotal test of whether AI spending is an investment — or an indulgence.
The AI spending question
Both companies face the same investor interrogation: when does AI spending turn into profit? Meta’s Reality Labs continues to bleed billions, while Tesla’s robotaxi and Optimus programs are years from meaningful revenue. With the Nasdaq already wobbling on AI skepticism, disappointing answers on Wednesday could extend tech’s rough patch into week’s end.
