Meta Falls Nearly 7% as AI Spending Overshadows a Strong Quarter

Meta Platforms fell nearly 7% on Thursday, closing at $648.85, as investors looked past a revenue beat and fixed on the cost of the company’s artificial-intelligence buildout.

The decline came to 6.98% in a single session, on volume more than double the recent average. Its cause sat inside the third-quarter report Meta released after Wednesday’s close. Revenue rose 26% from a year earlier to $64.60 billion. Net income more than tripled to $9.86 billion, or $3.83 a diluted share. The quarter looked strong.

Capital spending jumped to $34.9 billion

What unsettled the market sat lower in the release. Capital expenditures, including principal payments on finance leases, reached $34.91 billion for the quarter. Meta lifted the floor of its full-year 2026 capital-spending target to a range of $135 billion to $145 billion, up from the $130 billion low end it had guided in July. It also now expects full-year total expenses of $175 billion to $179 billion, a range that absorbs a $9.9 billion legal charge booked in the quarter. Free cash flow turned negative, at minus $2.12 billion.

A governance change landed alongside the numbers. Meta’s board declared a one-time stock dividend of one new Class C share for every Class A and Class B share, a step the company expects to precede a two-for-one split in the Class A price. Reporting on the session tied the market’s unease to that plan and to how Meta means to fund spending at this pace.

Meta ended September with $82.45 billion in cash and marketable securities, and it made no repurchases of Class A stock during the quarter, after buying back shares a year earlier. The company said its Reality Labs losses should narrow to around $15 billion in 2027 as it keeps investing in both its core apps and newer AI work. Headcount stood at 66,775, down 15% from a year earlier. Even as the stock fell, several Wall Street analysts raised their price targets, according to market reports.

A rotation out of Big Tech

The selling matched a broader move. Technology was the weakest sector in the session, down 3.29%, and communication services, where Meta sits, fell 1.42%. Money went the other way. Consumer staples rose 3.31% and utilities gained 2.07%, while the S&P 500 slipped just 0.48% and the Nasdaq Composite barely changed, even as the biggest growth names dropped.

For Meta, Thursday extended a weak month. The shares have fallen 12.8% over the past 30 days and sit 16.6% below their 90-day high of $777.59. The close still held above the 90-day low of $539.03. Volume ran at more than twice the 20-day average, the mark of a repricing rather than a drift.

What to watch

The 2026 capital-spending range of $135 billion to $145 billion now stands as the number to track, and the fourth quarter will show whether it holds. Meta has not set record or payment dates for the new Class C stock dividend or the split expected to follow. Those dates are not yet fixed. When they arrive, they will reshape the share count and the voting structure.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.