Meta Platforms, the tech juggernaut behind Facebook, Instagram, WhatsApp, Messenger, and Threads, delivered a financial performance that would make most companies envious: a 26% jump in third-quarter revenue, surging to $51.42 billion, and a robust 8% year-over-year increase in daily active users, now totaling 3.54 billion. Yet, despite these headline-grabbing numbers, Wall Street’s reaction was swift and sour. Shares tumbled 7.7% in after-hours trading on October 29, 2025, closing at $694 after an earlier finish at $751.67. What’s behind the market’s cold shoulder? In a word: spending. Or, more precisely, the promise of a lot more of it.
According to Reuters, Meta’s third-quarter costs soared by 32%, outpacing even its impressive revenue growth. The culprit? An aggressive push into artificial intelligence (AI) that’s sending the company’s capital expenditures skyward. In a call with analysts, CEO Mark Zuckerberg didn’t mince words: Meta is “aggressively front-loading building capacity” for AI, aiming to be ready for what he calls “personal superintelligence”—that elusive point where machines can outthink humans. “I think that it’s the right strategy to aggressively front-load building capacity, so that way we’re prepared for the most optimistic cases,” Zuckerberg said, acknowledging that if AI’s progress takes longer than expected, the extra computing power will still benefit Meta’s core business. And, in the worst-case scenario, the company would simply slow infrastructure investments in the future.
Meta’s appetite for AI is not just a matter of ambition—it’s a competitive imperative. As reported by IBTimes and Reuters, the company is racing against rivals like Microsoft, Alphabet, Amazon, and OpenAI, all of whom are pouring billions into AI data centers and talent. Meta has reorganized its AI efforts under the new “Superintelligence Labs” unit, with Zuckerberg personally leading an aggressive hiring spree. The company is now among the top buyers of Nvidia’s coveted AI chips, and by Zuckerberg’s own assessment, “we’ve already built the lab with the highest talent density in the industry.”
This hiring binge is not cheap. Employee compensation, especially for AI experts, will be the second-largest contributor to Meta’s expense growth in 2026, according to CFO Susan Li. The company will recognize a full year of pay for technical hires made throughout 2025, and it’s not just about headcount—these are some of the most expensive workers in tech. “Employee compensation costs will be the second largest contributor to growth, as we recognize a full year of compensation for employees hired throughout 2025, particularly AI talent, and add technical talent in priority areas,” Meta stated in its earnings release.
Infrastructure spending, however, will take the top spot. Meta is building out massive new data centers, servers, and networking capacity to support its AI ambitions. For 2025, the company raised the lower end of its capital expenditure outlook by $4 billion, now projecting $70 billion to $72 billion—up from the previous $66 billion to $72 billion range. Analysts expect a similar, if not higher, level of investment in 2026. According to FactSet, Meta’s total expenses could hit $97 billion next year, and the company itself expects 2025 expenses to land between $114 billion and $118 billion, more than 20% higher than the previous year.
Despite these eye-popping numbers, some analysts remain bullish. Debra Aho Williamson, founder and chief analyst at Sonata Insights, told IBTimes, “For Meta, advertising is the foundation; AI is the growth engine. There’s a lot of focus on Meta’s capital expenditures related to AI, which is completely warranted. The spending is absolutely massive. But with 26% growth in revenue in Q3, it’s clear that what Meta is doing to integrate AI into its ad products is working.” Andrew Rocco, a stock strategist at Zacks Investment Research, echoed this sentiment, saying, “the quarter was not terrible, and forward statements continue to be positive. Most importantly, management confirmed that they expect ad revenue to remain strong.”
Indeed, Meta’s advertising business remains the company’s cash cow, with the AI-optimized ad platform driving improvements in campaign automation, video quality, translation, and persona-based targeting. The company has also launched ads on WhatsApp and Threads, going head-to-head with competitors like Elon Musk’s X, TikTok, and YouTube Shorts in the lucrative short-form video market. For the current quarter ending in December, Meta forecasted revenue between $56 billion and $59 billion, roughly in line with analyst expectations.
But not all is rosy. A nearly $16 billion one-time tax charge—linked to the repatriation of overseas earnings and U.S. legislation—dragged reported net income for the third quarter down to $2.71 billion, or $1.05 per share, an over 80% decline. Excluding this charge, net income would have been a much healthier $18.64 billion, or $7.25 per share, handily beating Wall Street’s consensus estimate of $6.72 per share.
Beyond the balance sheet, Meta faces mounting legal and regulatory headaches. In the U.S., the company is awaiting a judge’s decision in a major antitrust case that could force it to divest WhatsApp and Instagram—two platforms it acquired more than a decade ago that have since become social media powerhouses. The company is also bracing for a slew of youth-related lawsuits, with trials scheduled for 2026, that could result in material losses. And in Europe, stricter data protection rules continue to squeeze Meta’s advertising business.
Market watchers are divided on whether Meta’s multibillion-dollar bet on AI will pay off in the near term. Jesse Cohen, a senior analyst at Investing.com, observed, “Meta’s earnings reveal the growing tension between the company’s massive AI infrastructure investments and investor expectations for near-term returns, with rising spending on artificial intelligence capabilities weighing on sentiment despite solid underlying business performance.” Jeremy Goldman, senior director at Emarketer, offered a more optimistic take: “After a few years of existential hand-wringing, the company has found its rhythm again by doing what it does best: scaling attention and monetizing it with ruthless efficiency. While everyone else is still pitching AI moonshots, Meta has quietly turned AI into margin. Its ad tools are sharper, its targeting smarter, and its short-form video business is finally paying off.”
As Meta barrels into 2026, the stakes couldn’t be higher. The company is betting that its aggressive investments in AI and infrastructure will not only keep it ahead of rivals but also unlock new levels of growth and efficiency. Whether shareholders will stay patient as costs balloon remains to be seen. For now, Meta stands at the crossroads of technological ambition and financial discipline, hoping its vision for “personal superintelligence” will justify the price tag.
