Meta's Free Cash Flow Decline Sparks Concern Among Investors
Meta Platforms (META) reported declining free cash flow in Q2, raising concerns among investors about its aggressive spending on AI and other initiatives. Despite a strong revenue increase of $60.8 billion year-over-year, earnings per share dropped by 13%, missing analyst expectations due to rising costs from AI development and infrastructure expansion. The company is investing heavily across multiple areas including next-generation AI models, smart glasses, custom chips, and large-scale data centers. These efforts are straining Meta's financials, with capital expenditures reaching $31 billion in Q2 alone. The firm now expects 2026 capex to range between $130 billion and $145 billion. Meta’s stock has fallen significantly over the past five trading days by nearly 12%, reflecting investor unease about its financial strategy.
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