Meta shares slide 6.6% as AI spending plans keep climbing
Meta's third-quarter sales rose 26%, but heavy capital outlays and negative free cash flow revived investor concern over its AI build-out.
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what happened
Quarterly sales came in at $64.60 billion, a 26% rise, Meta Platforms said in results cited by GuruFocus. The company now expects full-year capital spending between $135 billion and $145 billion, after lifting the bottom of that range by $5 billion. By 10:40 a.m. EST on October 22, the stock had dropped 6.63%.
Audience and advertising metrics stayed strong: daily active users reached 3.64 billion, up 3%, ad impressions grew 10%, and average ad prices climbed 14%. However, quarterly capex hit $34.91 billion, while total expenses surged 68% to $51.61 billion, including a $9.89 billion legal provision. Free cash flow turned negative at minus $2.12 billion.
The shares trade at $651.26, a 25.02% discount to GuruFocus's GF Value estimate of $868.55. The publication notes that the discount alone does not resolve the investment case.
why it matters
The key question for markets is whether advertising growth can fund AI infrastructure without a continuing cash drain. Revenue is still expanding quickly, but a shift to positive free cash flow is becoming the main test for investors in coming reports.
market impact
META and large-cap tech: rising AI spending pressures expectations for free cash flow
tags
instruments
sources
- Meta Stocks Fall 6.63% as AI Budget Keeps Swelling — gurufocus.com, 22 October 2026 at 19:35 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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