Meta's Muse AI costs weigh on margins and investor sentiment
Meta's quarterly report sent shares swinging as revenue grows, but spending on the Muse AI agent and capex is outpacing income.
- published on Newsmetry
- original source published
the public page opens no earlier than 15 minutes after we detect the story. approved stories may reach the api sooner. connect the api →
what happened
According to Barron's, Meta's third-quarter report was mixed: shares rose more than 7% in late trading but fell as much as 8% the next day. The company beat expectations on revenue and profit, excluding a one-time charge tied to its multistate child safety settlement, and issued solid fourth-quarter guidance.
The Muse AI agent has reached more than 10 million users in the U.S. and Canada, but it is expensive to run. CFO Susan Li said expanding the user base would require significant investment and that total serving costs would rise. Capital expenditure could reach $145 billion this year, squeezing free cash flow. Meta has gone four straight quarters without share buybacks, and a new nonvoting share class suggests possible equity sales that could dilute shareholders.
why it matters
Meta projects fourth-quarter revenue up about 24% from a year earlier while expenses grow 42%, which would push operating margin to 33% from 41%. The key question for markets is whether Meta can lower the cost per Muse user, as Mark Zuckerberg has promised, and how quickly new revenue streams follow.
market impact
Meta and tech sector: rising AI spending pressures the company's margins and free cash flow
tags
instruments
sources
- The More Muse Grows, the More It's Going to Cost Meta — Barrons.com, 23 October 2026 at 17:19 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
the public page opens no earlier than 15 minutes after we detect the story. approved stories may reach the api sooner.
get stories in real time ↗