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# Meta Q3 Preview: The Capex Is Set. Watch How Meta Pays for It
- URL: https://www.thealphaagentic.com/meta-q3-2026-earnings-preview/
- Published: 2026-10-20T20:38:18.000Z
- Updated: 2026-10-26T14:10:38.000Z
- Description: Meta's own guidance implies its biggest spending quarters of 2026 are happening now. For Nvidia, Broadcom, AMD and power suppliers, the bigger questions are what Meta says about 2027 and how much of the bill moves off its balance sheet.
- Author: Eli Yang
- Tags: News, AI, Datacenters, Chips & Semis, Power & Energy, Deals & Earnings

**Update, Oct. 21:** Meta reported third-quarter results after the close. Read our analysis: [Meta Q3: Guidance Points to a Record Capex Quarter, and a New Way to Pay for It](https://www.thealphaagentic.com/meta-q3-2026-earnings-results/).

Meta (NASDAQ: META) has already guided itself into its [heaviest capex quarters of the year](https://www.thealphaagentic.com/hyperscaler-capex-tracker/), so the third-quarter spending number is largely spoken for. For chip, cloud and power suppliers, the open questions are whether that pace carries into 2027 and how much of the build lands on partners' balance sheets instead of Meta's.

Meta spent $50.92 billion on capital expenditures, including principal payments on finance leases, in the first half of 2026, based on its [first-](https://www.sec.gov/Archives/edgar/data/1326801/000162828026028364/meta-03312026xexhibit991.htm?ref=thealphaagentic.com) and [second-quarter releases](https://www.sec.gov/Archives/edgar/data/1326801/000162828026050596/meta-06302026xexhibit991.htm?ref=thealphaagentic.com). If the full year lands within its $130 billion to $145 billion range, our arithmetic puts second-half capex at $79 billion to $94 billion, or roughly $40 billion to $47 billion a quarter. Those are our calculations, not Meta's guidance. Even the low end would top its biggest quarter so far: $31.08 billion in the second quarter, up from $17.01 billion a year earlier.

So far, the bigger bill hasn't weighed on the stock: Meta shares closed at $694.25 on Oct. 20, up 18.6% from July 29, when the company last reported and narrowed its capex range. It [reports third-quarter results](https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-to-Announce-Third-Quarter-2026-Results/default.aspx?ref=thealphaagentic.com) after the close on Wednesday, Oct. 21, with a call at 4:30 p.m. ET. We'll publish our analysis after the results.

![Meta quarterly capex vs. depreciation, Q3 2024 to Q2 2026, capex far outpacing D&A](https://storage.ghost.io/c/b0/f1/b0f115e2-04db-4451-bca9-8288bfdeb3a5/content/images/2026/10/meta-q3-2026-preview-capex.png)

Capex reached $31.08 billion in Q2 2026, about five times depreciation. Source: Meta quarterly earnings releases. Chart: Alpha Agentic.

## How the capex guidance moved

**Capex range:** Meta [first guided](https://www.sec.gov/Archives/edgar/data/1326801/000162828026003832/meta-12312025xexhibit991.htm?ref=thealphaagentic.com) 2026 capex to $115 billion to $135 billion in January. In April it [raised the range](https://www.sec.gov/Archives/edgar/data/1326801/000162828026028364/meta-03312026xexhibit991.htm?ref=thealphaagentic.com) to $125 billion to $145 billion, citing "higher component pricing" and, to a lesser extent, data center costs for future capacity. In July it [narrowed the range](https://www.sec.gov/Archives/edgar/data/1326801/000162828026050596/meta-06302026xexhibit991.htm?ref=thealphaagentic.com) to $130 billion to $145 billion.

**2027:** "We aren't providing a specific outlook for 2027 CapEx at this time," CFO Susan Li said on the [second-quarter call](https://s21.q4cdn.com/399680738/files/doc%5Ffinancials/2026/q2/META-Q2-2026-Earnings-Call-Transcript.pdf?ref=thealphaagentic.com). She said plans are geared toward "maximizing capacity in 2026 and '27." A year ago, Meta's third-quarter release [first signaled](https://www.sec.gov/Archives/edgar/data/1326801/000162828025047114/meta-09302025xexhibit991.htm?ref=thealphaagentic.com) that capex dollar growth would be "notably larger in 2026 than 2025."

## Depreciation lags, cash flow doesn't

Second-quarter depreciation and amortization was $6.36 billion, up 46% from a year earlier; capex ran about five times that. Spending hits cash flow now and earnings over years. Operating cash flow was $31.86 billion, but free cash flow was $784 million, down from $8.55 billion a year earlier.

**Debt:** Long-term debt was $83.66 billion on June 30, up from $28.83 billion at the end of 2024\. Meta sold [$30 billion of notes](https://www.sec.gov/Archives/edgar/data/1326801/000119312525262593/d75422d8k.htm?ref=thealphaagentic.com) in November 2025 and [another $25 billion](https://www.sec.gov/Archives/edgar/data/1326801/000119312526204128/d134616d8k.htm?ref=thealphaagentic.com) in May 2026.

**Off the balance sheet:** Meta owns 20% of its [Hyperion venture](https://investor.atmeta.com/investor-news/press-release-details/2025/Meta-Announces-Joint-Venture-with-Funds-Managed-by-Blue-Owl-Capital-to-Develop-Hyperion-Data-Center/default.aspx?ref=thealphaagentic.com) in Louisiana with funds managed by Blue Owl Capital (NYSE: OWL), and does not consolidate it. Its [second-quarter 10-Q](https://www.sec.gov/Archives/edgar/data/1326801/000162828026050705/meta-20260630.htm?ref=thealphaagentic.com) puts Meta's maximum exposure to loss at $46.03 billion, including a residual value guarantee threshold of about $28 billion. In July, Meta and BlackRock (NYSE: BLK) [announced a similar 1-gigawatt venture](https://www.prnewswire.com/news-releases/meta-announces-new-strategic-venture-with-blackrock-to-develop-data-center-in-el-paso-302836040.html?ref=thealphaagentic.com) in El Paso, Texas, with about $14 billion in development costs. The 10-Q called it an exclusivity agreement expected to close in the third quarter; we could not confirm that it has. The 10-Q also lists $349.31 billion of non-cancelable commitments, mostly third-party cloud capacity and infrastructure.

**Expenses:** In August, Meta [said](https://investor.atmeta.com/investor-news/press-release-details/2026/Metas-Agreement-With-Bipartisan-Attorneys-General-Calling-on-TikTok-and-YouTube-to-Join-Us-in-Supporting-Teens/default.aspx?ref=thealphaagentic.com) it expects to book a legal expense of about $10 billion in the third quarter that "was not contemplated" in its $165 billion to $169 billion 2026 expense range. It left its capex range unchanged.

## Where the money lands

**GPUs:** Nvidia (NASDAQ: NVDA) [said in February](https://nvidianews.nvidia.com/news/meta-builds-ai-infrastructure-with-nvidia?ref=thealphaagentic.com) that Meta will deploy "millions" of Blackwell and Rubin GPUs and adopt Spectrum-X Ethernet switches. AMD (NASDAQ: AMD) [signed a deal](https://ir.amd.com/news-events/press-releases/detail/1279/amd-and-meta-announce-expanded-strategic-partnership-to-deploy-6-gigawatts-of-amd-gpus?ref=thealphaagentic.com) for Meta to deploy up to 6 gigawatts of Instinct GPUs, with first-gigawatt shipments due to start in the second half of 2026.

**Custom silicon:** Broadcom (NASDAQ: AVGO) [extended its partnership](https://investors.broadcom.com/news-releases/news-release-details/broadcom-announces-extended-partnership-meta-deploy-technology?ref=thealphaagentic.com) on Meta's MTIA chips through 2029, with an initial commitment of more than 1 gigawatt.

**Cloud:** CoreWeave (NASDAQ: CRWV) [disclosed](https://www.sec.gov/Archives/edgar/data/1769628/000176962826000154/ex991.htm?ref=thealphaagentic.com) a roughly $21 billion Meta contract running through December 2032\. Nebius (NASDAQ: NBIS) [signed a deal](https://nebius.com/newsroom/nebius-signs-new-ai-infrastructure-agreement-with-meta?ref=thealphaagentic.com) worth up to about $27 billion over five years.

**Power:** In January, Meta [struck agreements](https://www.reuters.com/business/energy/meta-strikes-nuclear-power-agreements-with-three-companies-2026-01-09/?ref=thealphaagentic.com) with Vistra (NYSE: VST), Oklo (NYSE: OKLO) and privately held TerraPower for up to 6.6 gigawatts of nuclear power, for data centers including its [Prometheus cluster](https://www.utilitydive.com/news/meta-nuclear-deal-oklo-vistra-terrapower-ai-data-centers/809215/?ref=thealphaagentic.com) in Ohio.

## The Alpha Take

Unless Meta cuts its range, our math says the second half must average at least about $40 billion a quarter, and the deals above show where that money goes. What the guidance doesn't say is who carries the bill. Free cash flow was under $1 billion last quarter, long-term debt has nearly tripled since the end of 2024, and a growing share of capacity sits in ventures and cloud contracts outside the capex line.

For suppliers, demand for GPUs, custom chips, networking and power now rests partly on Blue Owl-managed funds, CoreWeave and Nebius, and potentially BlackRock's funds, not just Meta's own cash. That can keep orders flowing even if reported capex flattens, but it spreads the risk to partners and lenders. A first 2027 signal would tell suppliers how long the ramp runs; the financing lines will show who pays for it.

## What to Watch

**Capex:** Is it near the roughly $40 billion quarterly pace we calculate from guidance (year-ago: $19.37 billion), and does the $130 billion to $145 billion range move?

**2027:** Any direction on capex or expenses.

**Expense range:** How it absorbs the roughly $10 billion legal charge.

**D&A and free cash flow:** Year-ago figures were $4.96 billion and $10.62 billion.

**Debt and commitments:** Long-term debt, the 10-Q commitments total and whether El Paso closed. New lease commitments matter most for data center landlords such as Digital Realty (NYSE: DLR) and Equinix (NASDAQ: EQIX).