Meta shares dropped by more than 11 percent on Oct. 30, registering its largest single-day drop in three years, after the company’s third-quarter earnings release showed higher spending on computing requirements, including for artificial intelligence (AI).
On Wednesday, Meta reported revenues of $51.2 billion for the third quarter ending Sept. 30, up 26 percent from the same period last year. However, costs grew by a larger magnitude, increasing by 32 percent to reach $30.7 billion.
The company predicted capital expenditure for 2025 overall to be in the range of $70 billion to $72 billion, up from its previous estimate of $66 billion to $72 billion.
During an Oct. 29 earnings call, Meta CFO Susan Li attributed the 32 percent jump in costs to three factors—higher legal-related expenses; acceleration in employee compensation, particularly in AI; and higher infrastructure costs, including increased expenditure associated with “expanded data center fleet.”…