Meta Stock Plunges 10% on Q2 Profit Miss and AI Spending Surge
Meta Platforms reported Q2 2026 earnings per share of $6.18, missing estimates by 14%, as costs surged 55% to $42 billion. Revenue rose 28% to $60.8 billion, but free cash flow collapsed 91% to $784 million due to $31 billion in capital expenditures for AI infrastructure. Shares fell 10% in after-hours trading, erasing $15 billion from CEO Mark Zuckerberg’s stake. The company raised full-year capex guidance to $130-145 billion and hinted at launching a cloud business, while investors questioned the return on massive AI spending.
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Meta shares plunge as AI spending spooks investors despite revenue beat
Meta Platforms shares fell up to 10% on July 30, 2026, after third-quarter earnings missed profit expectations despite a revenue beat. EPS of $6.18 fell well short of the $7.22 consensus, while revenue of $60.8 billion topped forecasts. Total costs surged 55% year-over-year to $42.03 billion, including over $1 billion in severance. CEO Mark Zuckerberg declined to provide specific 2027 capex guidance, citing a dynamic infrastructure planning environment. Reality Labs posted a $4.6 billion loss on $431 million in sales. The selloff extended a record 10-day losing streak for Meta stock. Analysts at BofA attributed the drop to investor concerns over spending direction and higher stock-based compensation, not weakening fundamentals. XTB research noted the sharp selloff was driven by the astonishing burn rate of free cash flow.
Why Meta Platforms Stock Fell 10% Today
Meta Platforms (NASDAQ: META) shares fell as much as 10.4% on July 30, 2026, following the company's Q2 2026 earnings report. While revenue of $60.8 billion beat expectations and grew 28% year-over-year, investors focused on shrinking profits and a challenging cash flow picture. Earnings dropped 13% to $6.18 per share, and free cash flow plunged to $784 million from $12.4 billion in the previous quarter. The primary cause was massive spending on data centers, with capital expenditures reaching $31 billion in a single quarter. CEO Mark Zuckerberg outlined an ambitious AI future involving personal and business AI agents, but investors are questioning when the heavy spending will pay off. Meta's Reality Labs division, focused on the metaverse, lost another $4.6 billion. Full-year capex guidance was raised to around $138 billion, raising concerns that free cash flow could turn negative. Meta has over $90 billion in cash and marketable securities to absorb the spending for now.
Why Meta Platforms Stock Fell 10% Today
Meta Platforms (NASDAQ: META) shares dropped as much as 10.4% on Wednesday following the company's Q2 2026 earnings report. While revenue of $60.8 billion beat expectations and grew 28% year-over-year, investors focused on shrinking profits and a challenging cash flow picture. Earnings fell 13% to $6.18 per share, and free cash flow plummeted to $784 million from $12.4 billion in the previous quarter. The primary cause was massive spending on data centers, with capital expenditures reaching $31 billion in a single quarter. CEO Mark Zuckerberg outlined Meta's AI future, including personal AI agents and plans to sell AI compute capacity, but investors remain concerned about when the heavy spending will pay off. The Reality Labs division, focused on the metaverse, lost another $4.6 billion. Full-year capex guidance was raised to around $138 billion, raising fears that free cash flows could soon turn negative, though Meta holds over $90 billion in cash and marketable securities.
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Meta Platforms Falls 9% on Soft Guidance as Wall Street Slashes Price Targets
Meta Platforms shares fell 9% in early trading on July 30, 2026, after reporting Q2 earnings that missed EPS estimates by 13% due to a 55% surge in total costs, including legal charges and severance. Despite revenue of $60.8 billion beating expectations, the company's soft Q3 guidance and a massive $135-145 billion capex commitment for 2026 alarmed investors. Free cash flow plummeted to $784 million from $8.6 billion a year earlier. Ten major firms cut price targets, with Wells Fargo slashing from $835 to $640, citing limited visibility into AI monetization beyond advertising. In contrast, Microsoft shares jumped 15% as investors rewarded its tighter capex framing and clearer AI revenue path. The report highlights a growing divergence among hyperscalers in AI investment returns.
Meta Shares Slide After Weak Third-Quarter Revenue Outlook Overshadows Sales Growth
Meta Platforms shares fell over 8% in premarket trading after the company issued third-quarter revenue guidance of $61-64 billion, below the consensus estimate of $63.24 billion, despite beating Q2 revenue expectations. The social media giant reported Q2 earnings of $6.18 per share, missing the $7.17 forecast, as total costs surged 55% to $42.03 billion, including $2.4 billion in legal charges and $1.18 billion in severance costs. Revenue climbed 28% year-over-year to $60.8 billion, driven by advertising strength with ad impressions up 14% and average ad prices rising 12%. Capital expenditures reached $31.08 billion as Meta continues expanding AI infrastructure, causing free cash flow to plummet to $784 million from $8.55 billion a year earlier. The company narrowed its 2026 capex forecast to $130-145 billion and raised the lower end of full-year expense guidance. Bank of America analysts noted investor concerns about Meta's investment direction, while CEO Mark Zuckerberg emphasized that AI is accelerating the core business.
Zuckerberg Loses $15 Billion As Meta Shares Plunge Following Earnings Disappointment
Meta Platforms shares fell nearly 10% in after-hours trading on July 29, 2026, after reporting Q2 earnings that missed profit expectations. Diluted EPS of $6.18 missed the $7.22 consensus by 14.42%, snapping a six-quarter streak of EPS beats. While revenue of $60.8 billion beat estimates, net income slid 13.57% to $15.848 billion and free cash flow collapsed 91% to $784 million. Total costs surged 55% to $42.03 billion, driven by $2.40 billion in legal charges and $1.18 billion in severance from an 8,000-employee headcount reduction. The company raised full-year capex guidance to $130-145 billion, mostly for AI infrastructure, and total expense guidance to $165-169 billion. CEO Mark Zuckerberg defended the AI spending, saying it is accelerating the core business. The stock decline erased an estimated $15 billion from Zuckerberg's stake.
Meta stock drops 10% as free cash flow plummets and Zuckerberg hints at cloud business
Meta's stock fell up to 10% in after-hours trading on July 29, 2026, after the company reported a sharp decline in free cash flow to just $784 million, far below the $12 billion average of the previous eight quarters. While Q2 revenue rose 28% year-over-year, operating income for its Family of Apps fell to $23.4 billion from $25.0 billion, and net income dropped 14%. Capital expenditure surged to $31.1 billion, nearly double the prior year, as Meta invests heavily in AI infrastructure. CEO Mark Zuckerberg acknowledged plans to launch a cloud business to rent computing power, but framed it as a side quest, emphasizing higher margins from selling AI services. The company faces pressure as rivals Microsoft, Amazon, and Google already generate revenue from cloud rentals.
Meta stock drops 10% as free cash flow gets crushed—and Zuckerberg hints at cloud business
Meta's stock fell 10% following the release of its second quarter 2026 results, which showed a significant decline in free cash flow and disappointing forward guidance. The company's heavy spending on artificial intelligence (AI) infrastructure has raised concerns among investors, leading to skepticism about the return on these investments. CEO Mark Zuckerberg defended the company's AI strategy and hinted at a potential expansion into the cloud computing business to diversify revenue streams. Analysts remain divided, with some maintaining a buy rating despite the earnings miss, while others express caution over rising costs and uncertain profitability from AI initiatives. The earnings report highlighted a sharp drop in free cash flow, which has been a key metric for investors, and the company's guidance for the upcoming quarters fell short of expectations, triggering the sell-off.
Meta Profit Misses Estimates on Higher Costs, Revenue Beats
Meta Platforms reported second-quarter earnings per share of $6.18, down 13% year-over-year and missing the $7.22 analyst estimate, as costs and expenses surged 55% to $42 billion, including $2.40 billion in legal charges. Revenue rose 28% to $60.8 billion, beating the $60.17 billion consensus, driven by a 27% increase in advertising revenue. Operating income fell 8% to $18.8 billion, missing estimates, while operating margin contracted to 31%. Daily active people reached 3.6 billion, slightly below expectations. Reality Labs revenue of $431 million missed estimates, but its operating loss of $4.62 billion was narrower than forecast. Meta raised its full-year 2026 capital expenditure guidance to $130-145 billion and expects Q3 revenue of $61-64 billion. Shares fell about 6.7% in after-hours trading. CEO Mark Zuckerberg highlighted AI's role in accelerating the core business.