Meta Platforms reported Q2 revenue of $60.8 billion, slightly beating forecasts. However, earnings per share missed the mark by 13%, coming in at $6.18 instead of the expected $7.14. The market responded swiftly, slashing Meta’s shares by nearly 8% in after-hours trading.
Capital Spending Skyrockets With AI Investments
The company raised its full-year capital expenditure guidance sharply, now projecting $135 to $145 billion compared to the previous $125 to $145 billion range. This $10 billion jump at the low end signals a step-up in spending, particularly on AI infrastructure and data centers. In Q1 alone, capex hit $19.84 billion, and the latest announcement includes a massive $14 billion data center in Texas being developed alongside BlackRock, designed to deliver 1 gigawatt of power capacity.
Market Reaction and Implications
The EPS miss rattled investors, wiping tens of billions in market value from Meta overnight. Despite revenue beating targets, the cost of fueling aggressive AI expansion appears to pressure profitability. Meta’s latest report made no mention of crypto-related initiatives, marking a clear departure from past experiments such as the Diem stablecoin. The massive energy demands from new data centers could have ripple effects beyond tech, potentially impacting energy contracts that overlap with Bitcoin mining operations.
Meta's Shares Drop 5% After Raising Capital Spending Forecast Amid Slowing Profit Growth provides additional context on the stock’s volatility linked to spending hikes.
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