Meta Stock Price Forecast: Drops Below $700 Mark Ahead of Earnings, Could Fall Over 10% Further

TradingKey - Meta breaks below the $700 critical line; ahead of crucial earnings report, stock price risks falling another 10%.

On October 21 Eastern Time, shares of Meta Platforms (META) continued to face downward pressure, remaining below $700 in pre-market trading at $692.33. Meta's stock price has plummeted for several consecutive days from its mid-October high of $762.50. After losing its high-level consolidation platform, it broke decisively below the psychological $700 round-number mark yesterday.

The primary reason for Meta breaking below $700 ahead of its earnings report is the surge in U.S. Treasury yields and deleveraging in high-valuation tech stocks. In mid-October, higher-than-expected U.S. September CPI and PPI data drove U.S. Treasury yields higher. Amid expectations of interest rates remaining elevated, high-P/E, high-beta megacap stocks market-wide generally faced selling pressure from macro deleveraging, and Meta was no exception.

Amid high inflation and macroeconomic uncertainty, some brand advertisers have become more conservative with their budget spending ahead of the Q4 year-end holiday season, raising market concerns over Q3 ad revenue growth and Q4 guidance. Meanwhile, quarterly operating losses of several billion dollars in Meta's hardware and metaverse division have yet to narrow significantly, serving as a catalyst for selling pressure in a market environment favoring operational efficiency.

In addition, Meta has continued to expand its investments in AI infrastructure recently, including large-scale computing clusters, the Muse Spark platform, and custom AI chips. This has drawn intense market focus on whether management will further raise its full-year 2026 CapEx scale. Concerns that high CapEx, combined with potential debt issuance or financing plans, could squeeze short-term free cash flow have prompted institutional investors—who demand strong cash flow returns—to adopt a defensive stance.

If Meta's Q3 earnings report released after market close today shows both earnings per share (EPS) and revenue beating expectations, alongside strong Q4 holiday advertising peak season guidance, the stock stands a high chance of quickly returning above $700 on heavy volume. Conversely, if the earnings guidance turns conservative, Meta's stock price will fall further below the Fibonacci 0.382 retracement level near $690, seeking a new support line below.

Meta stock price chart, Source: TradingView

In an even worse-case scenario where Meta reports disappointing earnings and underperforming guidance, META cannot be ruled out from testing the psychological $600 round-number mark on the downside during a short-term shakeout, representing a downside potential of over 10% from current levels. However, a breakdown below this level remains unlikely unless the broader U.S. stock market continues to face pressure in upcoming trading sessions due to macro inflation and surging Treasury yields.