Meta’s AI Spending Spree Sparks Investor Concerns, Stock Plummets 10%
Meta Platforms shares tumbled over 10% following its Q3 earnings report, as investors balked at the company's aggressive AI investment strategy. While revenue beat expectations, earnings per share missed targets due to a tax-related charge and ballooning capital expenditures.
The social media giant now projects 2025 capex between $70-$72 billion, up from prior guidance of $66-$72 billion. CFO Susan Li warned expenditures will grow "notably larger" in 2026, with infrastructure costs driving the increase. Meta's relentless AI push—including massive data center builds and talent acquisitions—has outpaced even tech peers like Amazon and Microsoft.
Wall Street's reaction suggests diminishing patience for Zuckerberg's moonshot bets. When AI spending directly impacts bottom-line results, as seen in Q3's EPS shortfall, investors appear increasingly unwilling to fund what they view as speculative ventures.
