Meta shares slide as AI spending outweighs better-than-expected revenue

what happened

According to stockstory.org, Meta Platforms shares dropped 5.7% in the morning session, erasing earlier pre-market gains. Investors were unsettled by spending on artificial intelligence. A regulatory filing, reported by Bloomberg, showed the company's long-term commitments for AI data centers, energy infrastructure and computing capacity at about $825 billion, up from nearly $700 billion in July.

Third-quarter revenue rose 26% to $64.60 billion, and fourth-quarter sales guidance came in above consensus. Capital expenditure, however, reached $34.91 billion, pushing free cash flow to negative $2.12 billion. The company raised the bottom of its 2026 capex guidance to $135–145 billion. GAAP EPS was $3.83 against analyst expectations of $5.46, partly due to a $9.89 billion youth-litigation charge. Excluding that charge, EPS would have been $7.40.

Meta also lifted its full-year expense guidance to $175–179 billion and announced a new non-voting Class C share class to fund long-term infrastructure. On the earnings call, CFO Susan Li said aggressive AI investment would continue into 2027.

why it matters

The key question for the market is how well these investments pay off. Meta's shares are already volatile, with 16 moves greater than 5% over the past year, so stockstory.org characterized the decline as meaningful but not a fundamental change in how the business is viewed. The stock trades 16% below its 52-week high of $777.59 and is roughly flat for the year. Investors will focus on Meta's October 27 earnings report and on how the debt-like commitments and potential shareholder dilution from the new share class affect cash flow.

market impact

Meta and large tech firms with heavy AI budgets: rising capex pressures free cash flow and share prices

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