Meta’s Aggressive AI Spend Overshadows Earnings Beat, Sparks Stock Plunge

Meta Platforms delivered a stellar Q3 performance with revenue soaring 26% year-over-year to $51.2 billion, surpassing analyst estimates by nearly $2 billion. Earnings per share hit $7.25, comfortably exceeding the projected $6.69. Yet shares cratered 15% post-earnings as investors balked at Zuckerberg's ambitious AI spending roadmap.

The social media giant plans to ramp capital expenditures to $70-72 billion in 2025, with CFO Susan Li warning of "notably larger" 2026 outlays that could exceed $100 billion. This aggressive investment strategy comes despite declining free cash flow, which dropped to $10.6 billion from $15.5 billion year-over-year as infrastructure costs mounted.

Ad metrics showed resilience with impressions growing 14% and average ad prices rising 10%, while daily active users climbed 8%. But the market's focus remains fixed on Meta's high-stakes gamble - sacrificing near-term profitability to dominate AI infrastructure development.