Meta Shares Tumble Over 9% After Record Quarter as AI Spending Worries Persist

Meta shares dropped more than 9% on Thursday, even though the company beat Wall Street expectations in its third quarter report released after the bell on Wednesday. The stock later extended losses to about 8.3%, trading near $643.78. Revenue hit a record $64 billion, ahead of the $63.3 billion analysts expected. GAAP earnings per share came in at $3.83 against a forecast of $3.56, and would have reached $7.40 without legal charges tied to the company’s teen mental health settlement.

AI Spending Concerns Weigh on Meta and Chip Stocks

The selloff reflects a broader retreat from semiconductor and AI stocks, as investors question data center spending and the returns on huge AI investments. Meta lifted the low end of its capital expenditure range to $135 billion to $145 billion, up from $130 billion to $145 billion. It also carries $825 billion in commitments covering cloud capacity, energy services and consumer hardware. Analysts remained mostly bullish, pointing to the potential of the Muse AI agent and models. Mark Zuckerberg told investors that Muse should become very profitable over several years, provided AI compute efficiency keeps improving.

Meta 2-for-1 Stock Split and Class C Shares

Meta will also hand non voting Class C shares to all Class A shareholders, which works as a 2-for-1 stock split. The move is designed to let Zuckerberg keep voting control and remain in California if the state’s Proposition 40 passes on Election Day.