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Meta downgraded to Hold as AI spending outpaces cash flow despite 26% revenue growth in Q3

Analyst Insights
28 Oct 2026, 14:35 WIB
Seeking Alpha
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Bearish
Meta downgraded to Hold as AI spending outpaces cash flow despite 26% revenue growth in Q3

Meta Platforms reported a 26% revenue increase to $64.6 billion in Q3, but profit margins fell to 35.4% and EPS growth was just 2.1% excluding legal charges. The company’s heavy investment in AI is critical but has led to negative free cash flow, which is expected to continue through 2026. With a high valuation at 64 times cash flow and limited dividend yield, Meta offers limited safety for investors until AI investments start generating clear profits.

Meta Platforms shares are trading at USD 622.49 on Pluang, showing a modest 0.37% gain as of Oct 28, 2026 18:51 WIB. The stock's dividend yield remains low at 0.34%, with a typical hold time of 129 days among investors on the platform.

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