Analysis
Meta, Tesla and Lam Research Report After Wednesday's Close. Options Imply Moves of About 7%, Meta's Quarterly Capex Is Expected Near $41 Billion and Tesla's Earnings Are Seen Down 14%
Three of the reports that decide the AI trade land after the close on October 21. Meta is expected to earn $6.76 a share on revenue of $63.3 billion, up 23%, with capital spending of about $41 billion in the quarter, 117% more than a year earlier, inside a 2026 budget of $130 to $145 billion. Tesla's earnings are seen falling 14.5% on revenue near $28.1 billion despite record deliveries of 486,532. Lam Research is expected to post $2.18 a share on $8.14 billion. Options price moves of roughly 7% in each; Netflix moved 6% on Tuesday.
Wednesday evening is the first time this earnings season that the AI trade reports from both ends. Meta, the largest buyer of the chips, servers and data-centre capacity whose sellers have been punished for two weeks, is expected to report third-quarter earnings of $6.76 a share on revenue of $63.3 billion, up about 23% from a year earlier, according to the consensus cited by Yahoo Finance; Zacks has earnings closer to $6.54, down nearly 10%, because of the spending. Capital expenditure for the quarter is forecast near $41 billion, 117% more than a year earlier, within a 2026 range the company set at $130 to $145 billion. The shares fell 1.59% to $694.25 on Tuesday, and options imply a move of between 7% and 8% in either direction, against an average of 9.6% after its reports of the past two years.
Tesla reports the same evening with the opposite problem: strong volume and weak profit. Deliveries of 486,532 vehicles in the quarter beat the roughly 462,000 expected, but analysts polled by LSEG expect earnings per share to fall 14.5% from a year earlier and revenue to slip about 1%, to around $28.1 billion, as price cuts, tariffs and higher operating costs absorb the volume. Investors will look at the automotive gross margin, the energy-storage business and whatever Elon Musk says about the robotaxi rollout and the NHTSA review of the Cybercab. The shares rose 1.54% to $373.71 on Tuesday, the best of the large technology stocks, and options imply a move of 6% to 7.6%, well below the 15.6% drop after the last report.
Lam Research is the sell side of the trade. The chip-equipment maker, which lost 17% last week as Samsung and SK Hynix had their worst week since 2008, fell 3.21% to $263.45 on Tuesday and reports its fiscal first quarter after the close; consensus is $2.18 a share on revenue of $8.14 billion, against its own guidance of $8.10 billion plus or minus $400 million and $2.15 plus or minus 15 cents. Options imply a move of 7.4%, according to Benzinga. IBM, up 2.3% on Tuesday, also reports, and the Treasury sells $13 billion of 20-year bonds at 1 p.m. ET, the first auction of the long end since the 30-year yield fell back from above 5.5% to 5.43%.
What Tuesday's reports showed is that the market is pricing outlooks, not quarters: Netflix fell 6% on a fourth-quarter revenue forecast $70 million below consensus, GM fell 7% on a guidance midpoint 16 cents short, and SpaceX rose 8% on a quarter in which AI revenue tripled. Meta's number that matters is not the $6.76 but the 2027 capital-spending comment; Tesla's is the margin; Lam's is the December-quarter guide. Benzinga reckons Meta and Tesla together could swing more than $100 billion of market value on the night. The options market says 7%; this month's record says the reaction to the guidance will decide which side of that the move lands.