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Posted October 22, 2026 at 12:00 pm
The social media giant’s earnings beat even its own expectations, driven largely by AI-assisted ad sales.
What’s going on here?
Meta’s sales beat expectations last quarter, and it’s looking forward to a blockbuster holiday season – easing jitters about its AI spend.
What does this mean?
Sales rose 26% to $64.6 billion in the third quarter – slower than the previous quarter’s 28% growth, but beating analysts’ and Meta’s own predictions. It now expects $73 billion to $76 billion in sales for this quarter, ahead of forecasts.
▶ Most of that’s from advertising. And this quarter, though the number of ads Meta showed grew more slowly than before, it charged 14% more for each one than last year: a clue its AI tools are making its ads more valuable.
▶ Investors fretted about Meta’s huge AI spend going in – but even though it nudged up the bottom of its range to $135 billion, its shares still rose after hours.
For markets: Cloud-sized bills, without the cloud.
Meta spends big on AI like Microsoft, Amazon, and Alphabet – but earns it back differently. The three hyperscalers invest in building AI computing power, and when they rent that out, investors see the payoff in booming cloud sales. Meta’s AI investment mostly improves its ads, but it can be tricky to distinguish AI’s contribution from everything else driving ad sales. Higher ad prices give investors something to point to – even if they don’t quite prove the AI spend will pay off.
The bigger picture: Muse could rewrite Meta’s revenue playbook.
Meta already charges for heavier use of Muse through subscriptions – plus, the AI assistant will eventually earn a fee on purchases it makes on its users’ behalf. That could be a chunky revenue stream: Meta’s 3.6 billion daily users give it a ready-made audience – and what Muse learns about them could improve ads, too.
⚠️ But Amazon has already blocked Muse – a problem for users who want it to browse and buy from the world’s biggest e-commerce platform…
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Originally Posted October 22, 2026 – Meta’s Found Its Muse – And Its Ad Business Is Paying Its AI Bills
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