Meta Platforms shares fell by more than 7 percent despite record revenue of $51.2 billion in an adverse reaction to accelerated AI spending. Sales were up 26 percent year-over-year, but net income of $2.7 billion was far below analysts’ expectations. The company attributed the net income miss to accounting changes resulting from the One Big Beautiful Bill Act even as it advised analysts of “aggressive” capital expenditure increases to come. Meta’s 2025 capital expenditure forecast grew from the existing estimate of $66 billion to $72 billion. Most of that will be spent on data centers and researchers, Meta said, indicating 2026 capex would be “notably larger” and could reach as high as $100 billion.

On a Q3 earnings call Wednesday “Meta CEO Mark Zuckerberg reiterated a past theme, telling investors that it’s better for his company to spend heavily on artificial intelligence than to risk underinvesting,” CNBC reports, citing this year’s $14.3 billion investment in Scale AI as part of a costly plan to overhaul AI operations, now called Superintelligence Labs.

The spending comes amidst Meta’s layoffs of some 600 AI employees, though it said recent hires were unaffected.

“I’m very focused on establishing Meta as the leading frontier AI lab, building personal superintelligence for everyone,” Zuckerberg said on the earnings call, adding that “more than a billion monthly actives already use Meta AI, and we see usage increase as we improve our underlying models.”

While some worry that the spending companies like Meta, Nvidia and OpenAI could be fueling an AI bubble, The New York Times says Meta’s capital expenditures are now in line with “larger tech giants like Microsoft, which had projected spending of $88 billion for its 2025 fiscal year.”

Highlights of Meta’s Q3 results include 14 percent year-over-year growth in ad impressions across the company’s family of apps — including Facebook, Instagram, WhatsApp and Threads (which passed 150 million DAUs). For the family of apps, DAUs were up 8 percent year-over-year to “3.54 billion on average for September 2025,” with video showing particularly strong results, attributed to better recommendation algorithms.

“Meta’s core business of online advertising continued to provide the fuel for the AI spending,” NYT writes, noting that Q3 ad revenue was $51.2 billion, a 26 percent increase from a year earlier.

The Reality Labs segment was up 74 percent year-over-year, to $470 million, “partly due to retail partners stocking up on Quest headsets ahead of the holiday season,” the company said, adding that “we continue to lead the industry in AI glasses. If we deliver even a fraction of the opportunity ahead, the next few years will be the most exciting in our history.”

Related:
Meta, Google, and Microsoft Triple Down on AI Spending, Wired. 10/29/25