Meta Stock Drops 9.5% After Q2 Earnings Miss, Revenue Beats
window 24h
IN SHORT
Meta's stock experienced a significant drop of 9.5% in after-hours trading following a Q2 earnings miss, even though revenue surpassed expectations. The company is substantially increasing its investment in AI infrastructure, leading to a surge in capital expenditures to $31.08 billion and a narrowing of its 2026 capital expenditure forecast to $130 billion-$145 billion. This aggressive AI buildout has caused free cash flow to plummet by 91% year-over-year to $784 million, though AI is also noted to be boosting advertising revenue.
✉Newsletter
PiQ Daily
Pick your topics. Get only what matters, on your cadence.
Key Numbers
9.5%Meta stock drop
$130B-$145BMeta's 2026 capital expenditure forecast
$784 millionMeta's Q2 free cash flow
91%Meta's year-over-year drop in free cash flow
83%Meta's Q2 capital expenditure surge for AI
$31.08 billionMeta's Q2 capital expenditures for AI infrastructure
$145 billionMeta's expected capital expenditures this year
Who's Involved
Meta
Technology company reporting Q2 earnings and AI investments
Mark Zuckerberg
CEO of Meta highlighting AI's impact
1 / 3
Key facts
Meta's stock dropped 9.5% in after-hours trading.
Meta reported Q2 earnings below Wall Street estimates.
Meta's Q2 revenue slightly exceeded expectations.
CEO Mark Zuckerberg highlighted AI's role in enhancing apps and advertising.
Meta narrowed its 2026 capital expenditure forecast to $130 billion-$145 billion.
Meta is increasing investment in data centers for AI computing power.
Capital expenditures for AI infrastructure surged 83% to $31.08 billion in Q2.
Meta expects capital expenditures to reach up to $145 billion this year.
AI is boosting Meta's advertising revenue.
Meta Platforms saw its stock price fall by 9.5% in after-hours trading after reporting second-quarter earnings that did not meet Wall Street estimates, although revenue figures slightly exceeded expectations. CEO Mark Zuckerberg pointed to the integration of artificial intelligence as a key driver for improvements across Meta's applications and its advertising business. The company is undertaking a significant expansion of its AI computing power, necessitating a substantial increase in investment in data centers. Consequently, Meta has narrowed its capital expenditure forecast for 2026 to a range of $130 billion to $145 billion, an upward revision from the previously projected $125 billion to $145 billion. This intensified focus on AI infrastructure has led to a dramatic increase in capital expenditures, which surged by 83% to $31.08 billion in the second quarter of 2026. The impact of these investments on the company's financial health is evident in the sharp decline of its free cash flow, which dropped 91% year-over-year to $784 million for the same quarter. Despite the financial strain, Meta anticipates that its capital expenditures could reach as high as $145 billion this year, while also noting that AI is contributing to growth in advertising revenue.
Frequently asked questions
Meta's earnings per share for Q2 missed Wall Street estimates.
Meta's revenue slightly beat analyst expectations, with advertising revenue rising 27% to $59.36 billion.
Meta expects capital expenditures to be between $130-145 billion for the year.
Meta's CEO Mark Zuckerberg stated that AI is accelerating its core business, powering new products, and opening enterprise opportunities.
What Happens Next
01Meta will continue to invest in AI infrastructure and model development.
02The company will monitor the impact of AI on user engagement and advertising revenue.
03Investors will watch for further updates on Meta's AI strategy and capital expenditure plans.
Get the newsletter.
Pick the topics you actually care about. We'll email when there's news worth your time, on the cadence you choose. Cancel any time from your account.
