Stock drops 6% as heavy AI spending and restructuring clash with investor expectations
Meta (META) delivered a mixed third quarter, topping revenue forecasts but missing earnings per share after a one-time tax-related charge. Shares fell more than 6% in after-hours trading.
The company reported EPS of $1.05 on $51.24 billion in revenue, versus Bloomberg consensus of $6.72 EPS on $49.6 billion revenue. Meta’s core Family of Apps unit generated $50.77 billion, outpacing the anticipated $48.6 billion and underscoring resilient ad demand and engagement.
The results arrive amid an aggressive, AI-first capital plan. In recent months Meta has: invested $14.3 billion in Scale AI and hired its CEO as chief AI officer; earmarked at least $1.5 billion for a new El Paso data center; secured a $27 billion financing pact with Blue Owl Capital to fund the Hyperion campus in Richland Parish, Louisiana; and spent millions recruiting AI talent from rivals including OpenAI and Apple. At the same time, Meta laid off ~600 workers in its AI division, continuing Silicon Valley’s efficiency drive.
Unlike hyperscalers Amazon, Google, and Microsoft, Meta isn’t pushing enterprise AI services. Its strategy channels AI into ads performance and product engagement, while seeding capabilities into hardware such as Ray-Ban Meta smart glasses, the Quest 3 headset, and the newly announced Meta Ray-Ban Display glasses. Still, some analysts remain cautious. Olivier Blanchard of Futurum says Meta hasn’t yet clarified the consumer value proposition of its XR and Meta AI experiences.
Despite today’s slide, Meta shares are up 27% year to date and 26% over 12 months, trailing Google’s 43% YTD and 60% one-year gains. With Q3 earnings dynamics shaped by a tax charge and capex rising to support AI infrastructure, investor focus now turns to monetization—how quickly Meta can convert its outsized AI bets into sustained profit growth without further jolting margins.
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