Meta Creates Nonvoting Class C Stock to Fund AI Push as Q3 Revenue Hits $64.6 Billion

Meta Platforms reported third-quarter revenue of $64.6 billion, beating the $63.3 billion consensus estimate, and announced a new class of nonvoting shares designed to finance its accelerating artificial intelligence buildout without diluting Mark Zuckerberg's voting control. The company declared a one-time stock dividend of one Class C share for each outstanding Class A and Class B share, effectively a two-for-one split, with trading on Nasdaq expected to begin January 19, 2027. The CFO said Meta has no specific financing plans to announce immediately, but the shares could be used to raise capital for acquisitions, AI chip purchases, and talent compensation.

Operating income fell sharply to $12.99 billion, well below the $20.85 billion estimate, after the company absorbed a $9.89 billion charge related to a settlement with U.S. state attorneys general. Full-year capital expenditure guidance was narrowed to $135 billion to $145 billion, up from a prior floor of $130 billion, as Meta intensifies investment in data centers. Reality Labs losses are projected at $18 billion to $19 billion for 2026, narrowing to roughly $15 billion in 2027. Meta guided fourth-quarter revenue of $73 billion to $76 billion, with the midpoint above Wall Street's $73.57 billion estimate, and declined to provide a full-year 2027 revenue outlook.

CEO Mark Zuckerberg said more than 10 million people in the U.S. and Canada set up Muse personal agents in the first month and a half after launch, and he expects the platform to reach billions. Shopping is Muse's top use case, with more than a quarter of active users transacting and an average purchase size above $200. Zuckerberg said Muse could eventually generate higher revenue per user than Meta's existing Family of Apps, which already produces several hundred dollars per user annually, and that compute cost efficiency is expected to improve more than tenfold over the next year. Meta stock rose more than 3 percent in after-hours trading.

Tesla also reported after the close, beating adjusted earnings estimates with $0.48 per share versus the $0.43 consensus, on revenue of $28.05 billion that was roughly flat year over year. The headline surprise was free cash flow of positive $1.53 billion against a Wall Street estimate of negative $4.99 billion, as capital expenditure came in at $4.73 billion, below expectations. Gross margin improved to 19.6 percent from 16.8 percent the prior quarter. Tesla cut its full-year capex target to $20 billion from $25 billion. Operating income fell 56 percent year over year to $718 million. Elon Musk said demand is exceeding production by a significant margin and that the company aims for annual vehicle output of roughly 5 million by 2030. Optimus humanoid robot production has begun on high-volume lines in Fremont, with external deliveries to companies outside Tesla expected around the end of 2027. Active FSD subscriptions rose 67 percent year over year to 1.74 million.

Elsewhere in earnings, Texas Instruments posted Q3 revenue of $6.06 billion, up 28 percent year over year and above the $5.92 billion estimate, with data center revenue surging 95 percent year over year. IBM beat with revenue of $17.1 billion and raised its annual software growth outlook to 7 to 8 percent as previously delayed deals began closing. SpaceX shares rose roughly 7 to 9 percent during the session after the company reported $14.6 billion in revenue and $4.4 billion in net income for Q3, with AI computing revenue up 830 percent year over year, lifting broader AI sentiment and helping the Nasdaq close up about 1 percent on the day.