Meta Q3: Capex Floor Rises to $135–145B, a Nonvoting Class C Stock to Fund AI — and a $25B New Mexico Judgment the Same Day

Meta Q3: Capex Floor Rises to $135–145B, a Nonvoting Class C Stock to Fund AI — and a $25B New Mexico Judgment the Same Day

New subject (Q3 2026 results reported Wednesday, Oct 21, 2026). Meta's first earnings report since shipping its first frontier model landed better than the "AI spending reality check" framing feared. Per AP: "Meta Platforms said Wednesday that its third-quarter profit jumped more than threefold, as the social media giant's revenue climbed sharply" — net income of $9.86 billion ($3.83/share), up from $2.71 billion a year ago (which carried a ~$16B one-time tax charge). Revenue grew 26% to $64.60 billion, "above the $63.34 billion expected by Wall Street analysts." The quarter absorbed a $9.89B charge from the $18B multistate teen-mental-health settlement; excluding it, EPS would have been $7.40.

The AI-capex readouts the market was watching for:

• Capex floor raised, not trimmed: "Management narrowed its estimate for 2026 capital expenditures. It now anticipates spending will range from $135 billion to $145 billion, compared with an earlier estimate of $130 billion to $145 billion." No 2027 capex number, but Meta "expects to continue investing aggressively to support its core and AI businesses."
• A new funding instrument: the board approved "a new class of publicly listed, nonvoting Class C common stock¹, effective in January," intended "in part to boost the company's ability to raise capital for AI infrastructure investments." Zacks strategist Andrew Rocco: "Meta plans to issue nonvoting shares to fund AI investments without diluting CEO Mark Zuckerberg's control."
• Muse traction: Zuckerberg said "more than 10 million people in the U.S. and Canada have set up accounts for Muse" (launched August), "About 25% of people who have set up Muse use it on any given day," and Meta expects to improve the agent's cost efficiency "by more than 10 times in the next year, which will enable it to be profitable once the revenue lines are at scale."
• Investment shifting to AI: Reality Labs losses are expected to narrow to ~$15B next year "as the company shifts investments to other areas, primarily AI." Total expenses rose 68% YoY to $51.61B; headcount fell 15% YoY to 66,775. Q4 revenue guidance of $73–76B beat the $73.65B consensus. Shares rose 2.9% after hours.

Zuckerberg's framing in the release: "We hit major milestones this quarter toward delivering personal superintelligence for everyone — including launching Muse and Muse Wonder, our first frontier model. Our investments are paying off, the core business is strong, and we're seeing velocity across the board."

Why it matters: This is the first hard answer to the question hanging over the AI-capex debt wave since the OpenAI revenue-forecast cut (OpenAI Cuts Its 2026 Revenue Projection to ~$50B — and the Repricing Goes Global: Nikkei's 3rd-Largest Point Drop on AI-Chip Concerns) — whether the ad-funded anchor of the buildout was wobbling. It isn't: Meta raised the floor of its capex range, invented a dilution-free funding vehicle for more, and the market rewarded it. The same day, a federal judge ordered Meta to pay New Mexico $25 billion over Facebook privacy deception — per AP, "marking the biggest fine ever against the tech giant" — a reminder that Meta's AI-funded balance sheet is also absorbing historic legal liabilities.