Meta loses 12% market cap after $70B AI spending plan sparks investor doubts despite strong quarter

Meta Platforms’ stock took a sharp hit on Thursday, sliding more than 12% as investors grew uneasy about CEO Mark Zuckerberg’s massive new spending plans for artificial intelligence. The drop wiped out tens of billions in market value in a single day, overshadowing what was otherwise a strong earnings report.

The company raised its 2025 capital expenditures forecast to a range of $70 billion to $72 billion, up from an earlier projection of $66 billion to $72 billion, CNBC reported. The money is earmarked for expanding Meta’s AI infrastructure and capabilities as it races competitors like Google and Microsoft in building next-generation systems.

Zuckerberg pushed back against investor skepticism during Wednesday’s earnings call. “It’s pretty early, but I think we’re seeing the returns in the core business,” he said. “That’s giving us a lot of confidence that we should be investing a lot more, and we [want to] make sure that we’re not underinvesting.”

He added that Meta is “aggressively” building capacity to prepare for the rise of superintelligence — a point he believes could define the next era of technology. “We want to make sure we’re ideally positioned for a generational paradigm shift in many large opportunities,” he said.

Meta’s AI push isn’t happening in isolation. Just a day earlier, Alphabet boosted its own capex forecast to $91 billion to $93 billion, while Microsoft signaled higher spending growth this fiscal year. The tech giants are in a high-stakes race to dominate AI infrastructure, tools, and models that could redefine everything from search to social media to enterprise computing.

Earlier this year, Meta invested $14.3 billion in Scale AI, a move that also brought in its CEO, Alexandr Wang, to lead Meta’s new AI division called Superintelligence Labs, alongside former GitHub CEO Nat Friedman. The company has also struck multiple cloud partnerships to support its growing AI infrastructure.

For the third quarter, Meta reported adjusted earnings of $7.25 per share on $51.24 billion in revenue, beating Wall Street’s expectations. Revenue jumped 26% year-over-year, underscoring the strength of its advertising business and the continued growth of Instagram and Threads.

But even strong numbers couldn’t offset investor anxiety about spending at this scale. The company reported a $15.93 billion tax charge related to President Donald Trump’s One Big Beautiful Bill Act, further weighing on investor sentiment.

For Zuckerberg, the spending is a bet that Meta’s AI foundation will pay off later — a long game that could reshape its future. For investors, it’s a waiting game they’re not sure they want to play just yet.

In 2022, Facebook’s Meta laid off more than 11,000 employees after losing $700 billion of its value over a risky metaverse bet. The memory of that collapse still lingers on Wall Street, and it’s fueling doubts about whether Meta’s newest multibillion-dollar wager on AI could end up the same way.