Meta's AI Monetization Timeline Fails to Satisfy Investors
Meta Platforms Inc (NASDAQ:META) shares dropped as much as 10% following its third-quarter earnings report, which failed to convince investors that the company’s significant investments in artificial intelligence are yielding tangible returns. While revenue of $60.8 billion exceeded expectations, earnings per share came in below forecasts at $6.18 versus an expected $7.22. Meta also provided weaker-than-expected guidance for the current quarter and reported a 55% year-over-year increase in costs to $42.03 billion. Reality Labs, responsible for VR headsets and wearable AI devices, posted a $4.6 billion loss on just $431 million in sales during the period. CEO Mark Zuckerberg avoided providing specific capital expenditure guidance for 2027 but emphasized ongoing infrastructure planning to support growth through 2028. The company is also increasing its use of debt financing as part of efforts to reduce cost of capital. The stock’s decline marks a continuation of a challenging stretch, with Meta experiencing ten consecutive days of losses—the longest in the firm's history—raising concerns over spending efficiency and free cash flow burn.
Tickers: $META
Topics: AI monetization capital structure costs and expenses revenue guidance