Prediction: Meta Platforms Stock Will Drop After Earnings, and That Could Be an Incredible Buying Opportunity
2026-10-11 13:33
•Adam Levy •The Motley Fool
••••• • Axe Cap view
Meta's Earnings Dip: A Chance to Load Up
Meta’s upcoming earnings could trigger a sell-off, but it might pay off to buy on the dip.
Meta Platforms is gearing up to report Q3 results amid heavy spending on AI infrastructure, especially around its new Muse AI agent. Investors should brace for a possible share price drop—companies ramping up tech investments often see margins squeezed short-term. Meta’s forward PE of about 23 reflects the market pricing in growth but also near-term pain. The key for South Africans is how this plays through the rand and local tech exposure. While Meta isn’t listed on the JSE, Prosus holds a big chunk of it, so a Meta stumble could pull down Prosus, weighing on the tech-heavy portion of the market. On the flip side, the rand could soften initially on risk-off mood but might recover if investors see long-term AI promise as real. If you’re patient and can withstand volatility, this dip could be a chance to gain indirect exposure to AI growth through Prosus. this is just our opinion and not financial advice
Trim some exposure in Prosus if you’re risk-averse near earnings. But if you have a long horizon, adding modestly on signs of Meta’s pullback could pay off, given AI’s growth potential and reasonable valuation.
- Prosus
- USD/ZAR
- Meta’s AI bet fails to scale as expected
- Rand weakens further due to global risk aversion
6/10
Meta's stock may decline following Q3 earnings due to increased capital expenditures for AI infrastructure and potentially disappointing revenue outlook, driven by the rapid growth of its Muse AI agent. However, the author views this as a buying opportunity, as Meta trades at 23x forward earnings and is well-positioned for long-term AI-driven growth despite near-term margin pressures.
Our take is based on reporting first published by The Motley Fool.