Meta Reports Sharp Drop in Free Cash Flow Amid Heavy AI Investments
Meta Platforms reported a significant decline in second-quarter free cash flow, dropping to $784 million from $8.55 billion a year earlier due to heavy investments in artificial intelligence infrastructure. The social media giant's shares fell by 10% in extended trading as the results highlighted financial strain similar to Alphabet’s recent performance. CEO Mark Zuckerberg emphasized that Meta is betting on AI personal agents becoming a major consumer business, despite near-term costs and uncertain returns. Meta expects its AI spending for 2026 to reach up to $145 billion—double last year's investment—and plans to expand computing power significantly over the next two years. The company raised its capital expenditure outlook due to these commitments but also reported strong revenue growth of 28% in Q2, reaching $60.8 billion and marking one of its fastest growth rates since early 2021.
Topics: AI spending free cash flow Meta earnings