Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event in Menlo Park, California, US, on Wednesday, Sept. 17, 2025.
David Paul Morris | Bloomberg | Getty Images
Meta Platforms‘ stock experienced a sharp correction, suffering its largest single-day decline since October 2022, as investor sentiment turned cautious regarding the company’s ambitious AI spending initiatives, despite an otherwise robust earnings report.
Shares plummeted over 11% in Wednesday’s trading session, reflecting growing market unease concerning the timeline for profitability and the scale of investment required to achieve Meta’s long-term AI ambitions.
The social media titan revised its capital expenditure forecast upwards for 2025, signaling an intensified pursuit of advanced AI technologies. Meta now projects capital expenditures in the range of $70 billion to $72 billion, a revision from its previous guidance of $66 billion to $72 billion. This increased spending underscores the competitive pressures in the AI space and Meta’s determination to remain at the forefront of innovation.
CEO Mark Zuckerberg, during Wednesday’s earnings call, staunchly defended the company’s aggressive investment strategy, emphasizing the early signs of returns observed within Meta’s core business operations.
“It’s pretty early, but I think we’re seeing the returns in the core business,” Zuckerberg stated. “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.”
Zuckerberg further articulated the company’s long-term vision, stating that Meta is “aggressively” building capacity in anticipation of “superintelligence,” positioning the company to capitalize on what he anticipates will be a “generational paradigm shift” across diverse opportunities. This forward-looking statement highlights Meta’s belief in the transformative potential of AI and its strategic commitment to capture future market share in this nascent field. Analysts note, however, that ‘superintelligence’ remains a highly speculative area, and the path to realizing such advanced AI remains unclear.
Meta’s increased AI investments mirror a broader trend across the tech industry, with major players committing substantial resources to developing and deploying AI technologies. Like its competitors, Meta has earmarked billions to expand its AI capabilities in an increasingly competitive market. On Wednesday, Alphabet also increased its capex projections to between $91 billion and $93 billion, and Microsoft indicated expectations of escalating spending growth in the current fiscal year.
Earlier this year, Meta made a significant $14.3 billion investment in AI startup Scale AI, recruiting CEO Alexandr Wang to helm its Superintelligence Labs initiative alongside former GitHub CEO Nat Friedman. This strategic acquisition and leadership appointment further solidify Meta’s commitment to advancing its AI capabilities.
Furthermore, Meta has secured several new cloud computing agreements to bolster its AI infrastructure, reflecting its data-intensive approach to AI development and the need for scalable computing resources.
For the third quarter, Meta reported adjusted earnings of $7.25 per share on revenue of $51.24 billion, exceeding analysts’ consensus estimates. This performance highlights the company’s underlying strength despite concerns regarding its AI investments.
Revenue experienced a robust 26% year-over-year growth, boosted by a resurgence in digital advertising and the continued growth of its user base. However, the company also reported a $15.93 billion tax charge resulting from the implementation of the “One Big Beautiful Bill Act.” The long-term implications of this act on corporate profitability across the tech sector remain to be seen.
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