Meta Shares Drop as AI Spending Surges Despite Record Revenue

Meta Platforms posted record third-quarter revenue but warned of a major spike in spending on artificial-intelligence infrastructure, sending its stock tumbling more than 8% in after-hours trading.

The company reported $51.2 billion in quarterly revenue, up 26% year over year, but net income of just $2.7 billion—well below analyst estimates. The shortfall came largely from a one-time $15.9 billion accounting adjustment to reflect future tax liabilities under the One Big Beautiful Bill Act.

AI Spending Surge Alarms Investors

Meta said total expenses will rise at a “significantly faster” pace in 2026 as it expands its AI computing and data-center footprint. On a call with analysts, CEO Mark Zuckerberg said the company is “aggressively front-loading” investments to pursue its goal of developing superintelligence—AI systems capable of outperforming humans across a range of tasks.

“If superintelligence arrives sooner, we’ll be ideally positioned for a generational paradigm shift,” Zuckerberg said. “If it takes longer, we’ll still use the extra compute to accelerate our core business.”

The company hasn’t released an official 2026 capex forecast, but analysts already expect spending to surge to roughly $97 billion, up from an estimated $72 billion this year.

Building AI Infrastructure at Scale

Zuckerberg recently told attendees at a White House dinner that Meta plans to spend $600 billion on U.S. data centers and infrastructure through 2028. Much of that capital will fund AI compute clusters, networking hardware, and in-house supercomputers designed to train Meta’s next-generation AI models.

Last week, Meta and private-credit firm Blue Owl Capital raised $27 billion in a private-debt deal to finance construction of the company’s new Hyperion Data Center in Louisiana—one of the most extensive such facilities in the world.

Meta’s CFO, Susan Li, said rising employee compensation, particularly for top AI engineers and researchers, will be the second-biggest driver of cost growth next year. The company has been offering multiyear compensation packages worth tens of millions of dollars—sometimes more than $1 billion — tied to stock performance to retain elite AI talent.

AI Division Overhaul and Reorganization

Over the summer, Meta restructured its AI division, recruiting leading researchers from competing labs, acquiring a 49% stake in Scale AI, a data-labeling company, and hiring its CEO and several senior employees. The overhaul coincides with Meta’s pivot toward creating a unified AI group dedicated to achieving superintelligence.

Despite that expansion, Meta laid off roughly 600 employees from other AI-related teams last week. The restructuring underscores the company’s strategy of prioritizing its most advanced research while cutting redundancy elsewhere.

Balancing Growth and Risk

Analysts say Meta’s aggressive stance could pay off if its AI infrastructure investments translate into breakthroughs that support products such as Ray-Ban Display AI glasses and future metaverse applications. However, some warn that the company is entering a phase of high spending risk at a time when Wall Street is becoming more cautious about AI-related capital outlays.

Meta shares have gained nearly 70% year to date, driven by substantial ad revenue and investor enthusiasm for AI. But with spending accelerating faster than profits, analysts say the next two quarters will test whether Zuckerberg’s bet on superintelligence can deliver long-term shareholder value.