Meta Stock Forecast: AI Funding Push Puts $648.82 in Focus

TradingKey - Meta Platforms (NASDAQ: META) gained 1.44% on November 4 to close at $630.00. The stock traded as high as $643.09 before giving back most of its advance from the previous close, according to Meta’s stock data. A recovery above $648.82 would give buyers a stronger case.

The holiday quarter poses a different test for shareholders. Advertisers are paying more to reach Meta’s users, yet the company spent more on capital investment last quarter than it generated from operations. Its decision to raise equity makes the return on each new dollar of spending especially important.

Ad Prices Are Rising Alongside Impressions

Third-quarter revenue rose 26% to $64.60 billion. Across Meta’s apps, users saw 10% more ad impressions and advertisers paid 14% more per ad on average. Meta credits its recommendation systems with improving engagement and helping advertisers reach customers more efficiently, according to its October earnings release.

Both sides of that equation matter heading into the holiday shopping season. Higher prices can hold if merchants earn enough on the sales those ads generate. If advertiser returns weaken, Meta could keep showing more ads and still see revenue growth slow. Management projects fourth-quarter revenue of $73 billion to $76 billion.

A Legal Charge and Last Year’s Taxes Distort the EPS Comparison

Diluted earnings rose to $3.83 per share from $1.05 a year earlier, even as operating income fell 37% to $12.99 billion. A $9.89 billion charge tied to the teen mental health settlement reduced this quarter’s profit. Taxes magnified the year-over-year EPS increase. Meta’s effective tax rate fell from 87% a year earlier to 24%.

Meta calculates that excluding the legal charge would bring current-quarter EPS to $7.40 and operating income to $22.88 billion. That operating figure is about 11% above the $20.54 billion reported a year earlier. It gives a better sense of underlying progress than the near quadrupling of reported EPS.

The Preferred Offering Closed. The Forward Sale Pays Later.

Meta closed its mandatory convertible preferred offering on October 29. The base deal priced at $12.5 billion and carries a 6.50% annual dividend rate. The securities are scheduled to convert into common shares in 2029. Existing shareholders therefore face both a preferred dividend claim and eventual dilution under the offering terms.

The separate $25 billion common-stock offering works differently. Banks borrowed 40 million shares to sell at $625 apiece. Meta receives no proceeds from that initial sale. If it settles by delivering new shares, it expects about $24.9 billion before expenses at the initial forward price, subject to adjustments. Settlement is expected by November 19, 2027, according to the prospectus.

Meta also outlined a roughly $60 billion share-sale program after Class C trading begins. Timing and terms remain open. Counting the whole proposed program as cash available today would overstate how much of the buildout Meta has already funded.

A $2.12 Billion Cash Shortfall Raises the Cost of Waiting

Meta generated $32.79 billion of operating cash flow in the third quarter and spent $34.91 billion on capital investment, including finance-lease principal payments. The difference left free cash flow at negative $2.12 billion. Its full-year capital spending forecast is $135 billion to $145 billion.

S&P Global moved its credit outlook from stable to negative on October 30, citing uncertainty about when AI investment will generate enough cash. Meta disputed that assessment, pointing to its monetization opportunities. I would watch whether holiday ad sales narrow the cash deficit before giving much weight to forecasts for a new subscription business.

Muse Needs Retailers as Well as Shoppers

Meta sees a route to revenue through shopping fees and subscriptions for consumers and businesses. For shopping fees to add up, Muse needs access to stores where users want to buy. Walmart is working with Muse, while Amazon has blocked the assistant, according to November 4 Reuters reporting.

That split makes completed purchases a more useful measure than the number of people trying the service. Meta incurs computing costs when a shopper asks for help, even if the retailer prevents the transaction. Wider access and lower costs per request would improve the economics before Meta needs another round of funding.

Meta Technical Analysis: $648.82 Would Confirm the Rebound

Meta’s daily rebound began around $606.26, where a rising trendline meets horizontal support. On November 4 the stock reached $643.09, just short of the 23.6% Fibonacci retracement at $645.25. The retreat to $630.00 left buyers with a second hurdle. Horizontal resistance sits at $645.56, just below the 100-day exponential moving average at $648.82.

I remain neutral between support and that average. The relative strength index has recovered to 40.13 but remains below its midpoint. MACD, another momentum indicator, is still below its signal line. The gap between the two lines has narrowed, which suggests selling pressure has eased since the rebound began.

A daily close above $648.82 would clear both nearby resistance levels and favor a test of the 50-day average at $662.38. Until then, the November 4 high shows where buyers last lost ground. A daily close below $606.26 would break both forms of support and expose $568.95.

META Price Chart - Source: Tradingview

Key Levels

• Latest completed close: $630.00 on November 4
• Immediate resistance: $645.25 to $645.56
• Upside tests: $648.82, then $662.38
• Key support: $606.26
• Downside target: $568.95
• Daily RSI: 40.13, below neutral

FAQ

Did Meta receive $25 billion from the initial common-stock sale?

The banks sold borrowed shares. Meta expects proceeds if it physically settles the forward agreements by delivering shares.

What would confirm a stronger META recovery?

A daily close above $648.82 would clear the 100-day average and put $662.38 in view.

Bottom Line

Advertising gives Meta the cash to invest, but the return per share depends on how quickly AI revenue catches up with spending and dilution. The chart stays neutral between $606.26 and $648.82. A daily close beyond either level sets the next trade.