Investors punish Meta after CFO confirms multi-year compute investment plan despite strong ad revenue growth.
Meta shares fell 11% after CFO Susan Li stated the company will continue expanding compute capacity through 2028 and beyond. The commitment deepens concerns over sustained capital expenditures, despite a 28% year-over-year revenue increase to $60.8 billion in the latest quarter.
Advertising performance remained robust, with ad impressions up 14% and average prices rising 12%. However, capital expenditures surged to $31.1 billion from $17.0 billion a year earlier, nearly offsetting revenue gains. Free cash flow declined sharply as spending priorities shifted toward AI infrastructure.
CEO Mark Zuckerberg defended the strategy, citing long-term opportunities in consumer personal agents and premium compute sales. The market reaction reflects skepticism over Meta’s ability to monetize AI investments, particularly after past missteps like the Metaverse initiative.