Meta Platforms Stock Drops Over 8% Amid Concerns About Shrinking Profits and High Capital Expenditures
Meta Platforms (NASDAQ: META) saw its stock fall by more than 8.22%, with shares dropping as much as 10.4% following the release of Q2 2026 earnings results. While revenue came in at $60.8 billion, a strong 28% year-over-year increase and near the top end of guidance, investors were concerned about declining profits and weak free cash flow. Earnings per share fell to $6.18 from previous levels, while free cash flow dropped sharply to just $784 million compared to over $12 billion in the prior quarter. The primary concern was Meta's capital expenditures (capex), which reached a staggering $31 billion for Q2 alone—far exceeding Apple’s annual capex spending. CEO Mark Zuckerberg attributed this investment to building infrastructure for AI and personal superintelligence initiatives, including compute capacity sales to other companies in the future. However, investors remain skeptical given past ambitious visions that have yet to materialize into profits.
Topics: AI investment free cash flow Meta Platforms Q2 earnings report