Meta Misses Earnings Estimates Amid Rising Expenses
Meta Platforms reported second-quarter earnings that missed bottom-line estimates due to rising expenses from legal proceedings and severance payments, causing the stock to drop more than 10% after hours. Despite strong top-line growth with revenue up 28% year-over-year to $60.8 billion—driven by a growing ad business—the company's falling profits and increased capital expenditures raised concerns among investors. Meta’s management emphasized its aggressive spending on AI infrastructure, calling it a 'massive' opportunity but offering little reassurance about the financial impact of this strategy. Free cash flow for the quarter was less than $1 billion due to high capex expectations now set at $130–$145 billion annually. Despite the earnings miss and stock sell-off, some analysts argue Meta remains a compelling buy given its strong ad business margins and potential AI upside.
Tickers: $META
Topics: AI Investment Capital Expenditures Earnings Report Meta Platforms