Meta Platforms ( META ) will announce its third-quarter results on Wednesday, October 21st. Before the release of the 2026 third-quarter financial report, BMO Capital analyst Brian Pitz reiterated his "hold" rating for META stock, with a target price of $580. This five-star analyst agrees that Meta's continuously improving AI product momentum is strengthening its product narrative. However, he remains cautious about the scale and timing of commercialization, as he expects costs to rise as AI products are gradually launched.

According to the rankings of over 12,500 analysts tracked by TipRanks, Pitz ranks 563rd. His one-year success rate is 60%, and the average return on each rating is 11.50%.

Meanwhile, Wall Street expects Meta Platforms to report earnings per share (EPS) of $6.64 for the third quarter of 2026. In contrast, the company reported EPS of $1.05 in the same period last year, and adjusted EPS was $7.25 (excluding one-time tax expenses). The market expects its revenue to grow by about 24% to $63.34 billion.

BMO reiterates its "hold" rating on META stock ahead of the third-quarter financial report

Pitz indicates that although the early momentum of Muse and the release of Connect hardware highlighted the progress of Meta in AI, these advancements did not dispel market concerns regarding the company's projected capital expenditures of $144 billion in 2026 and $179 billion in 2027 and the returns that should come with them. He noted that since the release of Muse on September 8th, it has exceeded 9 million downloads in the United States, with a daily active user base (DAU) of about 2.3 million, indicating a steady early adoption. However, Pitz believes that providing 100 million free tokens to each user per week before transaction fees become significant could put pressure on short-term profit margins.

In addition, Pitz expresses encouragement towards Meta's recent launches of Muse Wonder and Muse Wonder Full, believing that these products seem to have narrowed the gap with leading models. However, he is concerned about how quickly corporate clients will be ready to adopt or switch to them. Analysts also agree that the appointment of Chirantan Desai has enhanced the credibility of the company's ambition to advance Meta Enterprise Platform. Nevertheless, he believes that the adoption of the enterprise platform may not be easy, as it is challenging to compete for market share from "deeply entrenched" corporate clients. Pitz believes that Meta's AI strategy is in a favorable position in the consumer market, supported by the opportunity to cross-sell to 3.6 billion active daily users.

Pitz summarized, 'Although the improvements to the Muse /model have made us slightly more optimistic about the commercialization of AI, we still hope to see a clear commercialization path and visibility into the expected cost trajectory for 2027.'

Is it worth buying META stocks now?

Overall, Wall Street has given a consensus rating of 'Strong Buy' on the Meta Platforms stock, based on 38 'Buy' and 6 'Hold' ratings. The average target price for the META stock is $828.28, which indicates there is still 19.3% room for upside.

Credit: The content of this article is based on a report from TipRanks.