META•META•Meta shares fell about 3% in premarket trading as investors weighed stronger-than-expected quarterly revenue and rapid Muse adoption against AI spending, including forecast annual capital expenditure of $135 billion to $145 billion. The company reported a $2.12 billion third-quarter free cash flow deficit and plans to appeal a $25 billion New Mexico penalty.
Meta shares fell about 3% in premarket trading as investors weighed its AI agent business against the cost of its expansion. The company reported stronger-than-expected quarterly revenue, forecast fourth-quarter sales above Wall Street estimates and highlighted rapid adoption of its Muse app. If the losses hold, the decline would erase about $50 billion from Meta’s market value.
Meta expects annual capital expenditure of $135 billion to $145 billion and reported a third-quarter free cash flow deficit of $2.12 billion, compared with positive free cash flow a year earlier. Deutsche Bank analyst Benjamin Black said AI investments were improving advertising performance and engagement, and described a “positive thesis creep” as investors increasingly see computing infrastructure as a revenue-generating asset.
Hours before the earnings report, a New Mexico judge ordered Meta to pay a $25 billion penalty in a data-privacy case linked to Cambridge Analytica; Meta said it plans to appeal. The company also announced plans for non-voting Class C shares to provide flexibility for acquisitions and employee compensation while preserving Mark Zuckerberg’s voting control. At least 13 brokerages raised their price targets after the results.
