META: Meta Stock Tumbles 7% Despite Double Beat. High Capex Is a Big Worry.

Nice performance by the Facebook parent. But $135 billion in planned capex weighed on investors’ minds.

📉 Stock Drops 7%

• Shares of Meta META fell about 7% after hours even though the company delivered a clean earnings beat. Apparently, investors chose to read the spending slide before the profit slide.
• Adjusted earnings reached $10.44 per share versus estimates near $6.67, while revenue climbed to $56.3 billion, topping expectations of $55.6 billion and rising 33% year over year.
• Even excluding a large tax benefit, EPS still landed around $7.31 — comfortably ahead of forecasts. The quarter itself wasn’t the problem. The future price tag was.

🤖 $135B Capex Raises Eyebrows

• “When Alphabet does it, everyone cheers, but when I do it, they dump me,” – Meta, probably, on raising its capex guidance.
• The Facebook and Instagram parent lifted its capital-expenditures outlook to roughly $135 billion at the midpoint, up from $125 billion previously, as component costs and AI infrastructure ambitions continue climbing faster than expected.
• Capex refers to long-term investments in things like data centers, chips and computing infrastructure. In Meta’s case, that means building the backbone for its AI-powered advertising and platform ecosystem.
• The spending surge pressured free cash flow and led Meta to skip share buybacks this quarter after repurchasing nearly $13 billion of stock a year earlier — a shift investors noticed immediately.

📊 Ads Still Doing the Heavy Lifting

• Daily active users rose only about 4% year over year to 3.6 billion, but Meta showed them 19% more ads and increased average ad prices by 12% — a powerful combination for revenue growth.
• Those gains suggest Meta’s AI-driven ad targeting is already improving engagement efficiency, helping the company monetize attention more effectively without relying solely on user growth.
• What’s the main takeaway? The business is strong, but the spending is a worry.