Meta Slides Into a Bear Market as Heavy AI Spending Strains Its Balance Sheet

Shares of Meta have dropped about 19% across the last 14 days, wiping roughly $400 billion off its market value and pushing the stock into bear market territory. What makes the fall striking is the company behind it. Meta is one of the so called Magnificent 7, the group of giant tech names that has carried much of the market for years.

Why Meta Is Spending So Much on AI

The pressure comes from the size of its AI bet. In a single quarter the company spent $34.9 billion, and it expects to spend between $135 billion and $145 billion across 2026. Spending at that pace has drained its cash. After investment costs, free cash flow turned negative at $1.16 billion, compared with a positive $11.2 billion a year earlier.

Rising Debt and Falling Margins

Debt climbed to $80.9 billion from $58.7 billion at the end of 2025. Operating profit also shrank to 20% of revenue, half the 40% level seen before.

Meta Share Sale to Fund Its AI Plans

To pay for all this, Meta began a $35 billion stock sale on Monday. It also plans to offer up to $60 billion more in new non voting shares starting in 2027. Investors tend to dislike fresh share issuance because it dilutes existing owners, which helps explain why the selling has been so sharp.