Meta could shake up the entire AI sector! Investors will be watching one key number

On Wednesday, October 21, 2026, Meta $META will report its third-quarter results. This time, it won’t be just about whether the company beats analysts’ expectations for revenue or earnings per share.

These results could have a major impact on the entire artificial intelligence sector, including Nvidia $NVDA , Broadcom $AVGO , Micron $MU and SK Hynix.

The main reason is Meta’s enormous capital expenditures (CAPEX) on building data centers, purchasing computing power and developing its own AI models.

Investors are increasingly asking one crucial question: Can tech giants make enough money from artificial intelligence to justify these astronomical investments?

The latest quarterly results revealed a major problem

In the second quarter of this year, Meta reported very solid revenue growth at first glance. But a closer look showed that its costs were rising much faster.

Q2 2026 results:

Revenue: USD 60.8 billion (+28% year over year)

Net income: USD 15.85 billion (−14%)

Earnings per share (EPS): USD 6.18 (−13%)

Operating margin: 31% compared with 43% a year earlier

Total costs: USD 42 billion (+55%)

Capital expenditures: USD 31.08 billion

Free cash flow: just USD 784 million

I consider that last figure (FCF) exceptionally important.

While Meta generated approximately USD 8.55 billion in free cash flow over the same period last year, this year it was just USD 784 million.

That represents a year-over-year drop of more than 90%!

It’s worth noting that investments in AI were not the only reason for the decline in operating income. Results were also affected by USD 2.4 billion in litigation costs and USD 1.18 billion in severance costs related to layoffs.

Even so, the trend is clear. Meta can increase revenue very quickly, but its massive investments are significantly reducing the amount of cash the company retains.

Meta plans to invest up to USD 145 billion!

And that brings us to the most important topic ahead of the upcoming results.

In 2025, Meta spent approximately USD 72.2 billion on capital expenditures. For this year, however, management expects to spend between USD 130 billion and USD 145 billion.

That means the company could nearly double its capital expenditures in a single year.

And it may not stop there.

Some analysts are already estimating Meta’s capital expenditures at USD 190 billion to USD 225 billion in 2027. These are not yet the company’s official projections, but they show how much investment the market expects.

The key question, then, is whether Meta will confirm that it plans to continue investing aggressively during Wednesday’s conference call, or signal that it intends to slow down.

And that information could have a major impact on the entire semiconductor industry.

Why are Meta’s results so important for Nvidia and other companies?

Meta is one of the world’s largest investors in AI infrastructure. Along with Microsoft, Amazon and Alphabet, it is driving huge demand for computing power.

Its investment decisions can therefore affect the entire supply chain.

Continued high capital expenditures would be a positive signal especially for:

Nvidia and AMD, which supply computing accelerators.

Broadcom, which operates in custom chips and data center networking.

Micron and SK Hynix, which are benefiting from growing demand for HBM memory.

TSMC, which manufactures the most advanced chips for technology companies.

Conversely, a significant cut to planned investments could raise concerns about slowing demand for AI infrastructure.

This is especially important in the current environment, as investors increasingly question whether tech giants’ enormous spending is sustainable.

According to estimates from Goldman Sachs cited by Reuters, capital expenditures by five major AI hyperscalers could reach approximately USD 1.2 trillion next year.

So if Meta, as one of the first major players, were to signal a more cautious approach to investment, the market could see it as a warning for other companies as well.

Interestingly, a potential slowdown in investment could affect Meta very differently from its suppliers.

If the company could cut capital expenditures without jeopardizing the growth of its core business, that could mean a significant improvement in free cash flow.

That would naturally be positive for its shareholders.

On the other hand, lower infrastructure orders could be a negative signal for semiconductor manufacturers benefiting from this investment cycle.

So what matters won’t just be the level of capital expenditures, but above all the reason for any change.

Investment efficiency and weakening demand for AI are two completely different things.

Muse is also part of the picture!

Another important topic will be the monetization of artificial intelligence.

In September, Meta introduced its personal AI agent Muse, and in October it launched new Muse Wonder and Muse Wonder Full models focused on advanced tasks, programming and working with information.

This shows that the company wants to use artificial intelligence not only to improve advertising algorithms, but also to create new products and revenue streams.

AI is already helping Meta improve recommendation systems and advertising efficiency, but investors will also want to see concrete financial results from its new AI products.

Technological progress alone does not automatically mean that massive investments in data centers will pay off.

What are analysts expecting from the upcoming results?

For the third quarter, Meta initially forecast revenue of between USD 61 billion and USD 64 billion.

According to current estimates from analysts tracked by Visible Alpha, expectations are:

Revenue: approximately USD 63.31 billion (+24% year over year)

Earnings per share: approximately USD 5.60

Personally, I won’t focus only on whether Meta beats these expectations.

What will matter much more to me is management’s comments on AI investments, operating margin trends, free cash flow and, above all, the outlook for 2027.

Is it worth investing in Meta shares before the quarterly results are released? And how high could its shares rise, according to Ondřej Koběrský? Find out in my new video!