US EditionMeta Sacrifices Near-Term Cash Flow to Outspend Rivals on AI Build-Out
Meta plans to nearly double AI infrastructure spending to $70 billion in 2025, and Microsoft also raises capital expenditure, sparking investor doubts about profit sustainability.
- On Wednesday, Meta Platforms and Microsoft saw their shares fall after earnings as traders reacted to new AI spending plans for next year.
- Meta said it would spend $70 billion to $72 billion on capex this year, allocating roughly 36-38% of revenue to projects, the highest ratio in company history.
- For context, Meta Platforms spent $31.4 billion on capex in 2022, while Microsoft reported a record $34.9 billion in quarterly capex and flagged higher spending ahead.
- Traders punished aggressive capex, prompting warnings from strategists as Peter Berezin called the drops a `yellow flag` for the AI trade and Meta Platforms' shares fell roughly 5% since earnings.
- Meta Platforms 's free cash flow compresses to around $20 billion with $70 billion in capex, and executives say the firm can absorb spending without debt amid broader market bubble concerns.
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Meta loses 12% market cap after $70B AI spending plan sparks investor doubts despite strong quarter - Tech Startups
Meta Platforms’ stock took a sharp hit on Thursday, sliding more than 12% as investors grew uneasy about CEO Mark Zuckerberg’s massive new spending plans for artificial intelligence. The drop wiped out tens of billions in market value in a […] The post Meta loses 12% market cap after $70B AI spending plan sparks investor doubts despite strong quarter first appeared on Tech Startups.
Meta, Microsoft stock sell-offs show investors are growing skeptical of colossal AI-spending plans
DREW ANGERER/AFP via Getty ImagesMeta and Microsoft's big AI spending plans have investors on edge, and both stocks are lower.Traders are starting to punish companies for capex spending is seen as a warning sign.Sign up for Business Insider's daily markets newsletter here.Mega-cap tech firms keep spending loads of cash on AI — and investors are starting to rebel.That was evident after Meta and Microsoft — two of the largest companies at the cent…
Meta Sacrifices Near-Term Cash Flow to Outspend Rivals on AI Build-Out
Meta Platforms (META) stock is down almost 10% in the pre-market this morning. Of everything Meta said this quarter, the real story wasn’t the revenue beat or the one-time tax charge that crushed reported net income. It was this: the company just committed to spending $70-72 billion on capital expenditures in 2025. That’s a 93% increase from 2024’s $37.3 billion. For context, Meta spent $31.4 billion on capex in 2022. The company is nearly doubl…
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