Meta Shares Down 34% from August Highs as AI CapEx Soars
Meta shares have plunged 34% from August highs and now trade near their April 2025 lows, while the S&P 500 sits 32% above that level. Major tech capex—led by Google, Microsoft, Amazon and Meta—is projected to hit $650 billion in 2026, a 60% increase, as elevated oil prices sustain Fed tightening.
1. Sell-Off Details
Meta has declined approximately 34% from its August all-time high and now trades near the lows last seen in April 2025, whereas the S&P 500 remains about 32% above that same level, highlighting a pronounced underperformance by the social media giant.
2. Macro Headwinds
Rising oil prices linked to Middle East tensions have fueled persistent inflationary pressures, prompting the Federal Reserve to maintain its higher-for-longer interest rate stance, which disproportionately weighs on growth-oriented technology stocks like Meta.
3. AI Infrastructure Spending
Capital expenditure for AI infrastructure among the four largest tech firms—including Meta—is expected to exceed $650 billion in 2026, a 60% jump from 2025, signaling heavy investment that may pressure near-term profit margins.
4. Sector Rotation
Institutional investors have shifted allocations away from digital growth names into energy, defense and domestic manufacturing, further exacerbating selling pressure on Meta as funds reposition toward perceived safe-haven sectors.