Josh Gilbert, Lead Analyst APAC and Middle East
Dubai, United Arab Emirates – October, 2025
Meta Preview:
Meta’s result lands at a nervous moment for the AI trade, and after CoreWeave’s bond yields blew out past 15% and dragged the Nasdaq to its worst week since June, this quarter carries far more weight than usual. Meta’s capital spending is someone else’s revenue, any insight into whether that budget grows or shrinks lands straight on the chipmakers and data centre builders that have been carrying this market.
Three months ago, investors were questioning whether Meta’s AI spending would ever pay off, and Muse has gone a long way towards changing that conversation. Shares have rallied almost 37% since the July result, with the Muse personal AI agent sitting at number one on Apple’s App Store since late September, giving investors the first real sign that Meta’s AI push can win over consumers and not just drain cash.
The core business doesn’t need to do much heavy lifting this quarter, with Meta guiding to revenue of USD$61 billion to USD$64 billion, although the settlement with US state attorneys general agreed in August is likely to muddy the headline numbers. The bigger focus is the bill, with capital spending guided at USD$130 billion to USD$145 billion this year after free cash flow shrank to just USD$784 million last quarter, so any early look into what costs may look like in 2027 will be watched closely.
Muse has changed the narrative, but there’s still a long way to go. App tracking data suggests downloads have levelled off since the launch surge, while time spent in the app is still climbing, which is the better sign of the two, because retaining users represents potential to truly monetise. Meta is still spending like a hyperscaler without a hyperscaler’s business model, so investors will want to hear how Muse starts paying its way, along with any update on the compute sales Zuckerberg flagged last quarter.
Nobody is questioning the AI buildout anymore, only who pays for it and when it pays back, and after a 37% rally, a solid quarter is already priced in. Investors now want to see the money that’s going out the door start coming back in
Tesla Preview:
Tesla heads into Q3 earnings this week with the car business showing a pulse again. The big question, though, is whether those extra cars actually made any money. Results land after the bell on Wednesday night in the US. Deliveries of 486,532 beat forecasts by about 5%, yet analysts still expect revenue of about USD$28 billion and adjusted earnings of roughly 44 cents a share, down from 50 cents a year ago, so the sliver of hope here is that volume is finally translating into margin.
Automotive revenue is still forecast to fall 7% on last year, with auto gross margin excluding credits modelled at roughly 16%, flat on the quarter, so any sign of pricing concessions will show up in margins quickly. Energy storage deployments of 13.7 GWh also fell about 14% short of forecasts, removing one of the steadier supports for the earnings story.
Cash is where Tesla runs into the market’s wider nerves about AI spending. Free cash flow is forecast to be negative again, against a positive figure a year ago, with capex guided above USD$25 billion this year and set to keep rising, and Tesla is lining up debt facilities of up to USD$30 billion to help fund it. After a week when the cost of financing AI infrastructure rattled markets, investors will want a much clearer picture of when that spending starts paying its way.
That puts the pressure on the more futuristic ambitions. FSD is growing, with 1.48 million active subscriptions at the end of June and more than 55% of new North American deliveries including it, but it remains a limited earnings contributor for now. The robotaxi rollout is moving ahead slowly, while Optimus robots still seem like a far-flung ambition. New models are a more tangible promise, but the ‘flying’ Roadster unveiled in a piece of pure theatre last week isn’t due to enter production until 2028, and a niche sports car was never going to be the answer to a delivery problem.
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