Meta Platforms saw its stock price fall by over 10% on Thursday. Investors worried about how much the company is spending on artificial intelligence, even though Meta announced strong financial results.
The social media giant increased its planned spending for 2025. Meta now expects to spend between $70 billion and $72 billion on things like new buildings and equipment, up from earlier estimates of $66 billion to $72 billion. This money will help Meta compete with other tech companies to build advanced AI tools.
CEO Mark Zuckerberg spoke up to defend the company’s big spending plans during an earnings call on Wednesday. He believes the investments are already helping Meta’s main business. “It’s pretty early, but I think we’re seeing the returns in the core business,” Zuckerberg stated. “That’s giving us a lot of confidence that we should be investing a lot more, and we want to make sure that we’re not underinvesting.” He explained that Meta is rapidly building its AI capacity to prepare for “superintelligence,” aiming to be in a leading position for future big opportunities.
Meta is not alone in spending huge amounts on AI. Competitors like Alphabet and Microsoft also boosted their spending forecasts. Alphabet, for example, now expects to spend $91 billion to $93 billion, and Microsoft anticipates higher spending growth this year. Earlier this year, Meta put $14.3 billion into AI startup Scale AI and brought its CEO, Alexandr Wang, to lead a new AI effort called Superintelligence Labs. Meta has also signed new deals with cloud providers to build its AI infrastructure.
For the third quarter, Meta reported impressive financial results. The company earned $7.25 per share, with total revenue hitting $51.24 billion. These figures beat expectations. Revenue grew by 26% year over year. However, Meta also reported a $15.93 billion tax charge related to the One Big Beautiful Bill Act, a bill introduced by President Donald Trump.
