Rhode Island Sues Meta (META) Over Deceptive Ads Amid Strong Val

Rosenblatt Securities reiterated a Buy rating and $900 price target on Meta Platforms (META) after its stock fell following news of a potential capital raise. Meta's third-quarter 2026 results showed 26% revenue growth, but mixed overall. Analysts have mixed views, with some raising targets and others expressing caution.

Meta (META) shares fell 6.6% on Oct. 22 despite beating Q3 revenue estimates ($64.6B vs. $63.41B) and raising AI spending forecasts. Analysts increased price targets, but investors reacted to higher expenses. Other tech stocks like Intel (INTC), AMD (AMD), and Nvidia (NVDA) also declined. Meta's Q4 revenue forecast is $73B-$76B, above estimates.

IBM and Meta Platforms raised concerns about AI spending. IBM's CEO noted enterprises are scrutinizing AI ROI, while Meta increased its 2026 capex forecast. Both companies' shares fell. Treasury yields dropped as investors questioned AI's financial returns.

Meta's stock fell 7% despite Q3 revenue of $64B, exceeding estimates. The company raised its capital expenditure forecast and announced a 2-for-1 stock split. Analysts remain bullish on its AI prospects, but investors are concerned about AI spending. Meta also faces a $25B judgment in New Mexico.

Meta's board agreed to allow Mark Zuckerberg to sell non-voting shares to cover a potential California billionaire tax, ensuring his ownership stake. The tax, if passed, would impose a 5% levy on wealth over $1 billion, potentially costing Zuckerberg over $11 billion. Meta's move aims to secure Zuckerberg's residency in California and raise capital for AI investments, according to regulatory filings.

Meta's board approved a new non-voting Class C stock, with a one-for-one dividend to existing shareholders. The move, disclosed with Q3 results, allows Meta to raise funds without diluting Zuckerberg's control. According to the SEC filing, Meta could raise $700B in equity before Zuckerberg's voting power falls below 50%. CFO Susan Li clarified the 'hundreds of billions' figure is a theoretical maximum, not current plans. Zuckerberg's voting power is about 60.6% as of October 1.