Meta Platforms, Inc. (formerly Facebook) saw its shares plummet more than 10% during U.S. trading on October 30, despite reporting strong quarterly results. The drop followed investor concerns over the company’s aggressive spending plans for artificial intelligence (AI) infrastructure.

The social media giant raised its 2025 capital expenditure guidance to $70–72 billion, up from a prior range of $66–72 billion, as it races to develop advanced AI tools. CEO Mark Zuckerberg defended the spending strategy during an earnings call, stating, “It’s still early, but we’re already seeing returns in our core business. This gives us confidence to scale investments and avoid underinvesting.” He added that Meta is “proactively” expanding capacity to prepare for artificial general intelligence (AGI), positioning the company for “generational paradigm shifts.”

Meta is not alone in ramping up AI investments. Alphabet (Google’s parent) raised its 2025 capex forecast to $91–93 billion, while Microsoft signaled higher spending growth this fiscal year. Earlier this year, Meta invested $14.3 billion in AI startup Scale AI and partnered with its CEO to lead the “Superintelligence Labs” initiative. The company also signed multiple cloud deals to bolster AI infrastructure.

For Q3, Meta reported adjusted earnings of $7.25 per share and revenue of $51.24 billion, both beating Wall Street estimates. Revenue grew 26% year-over-year to $51.2 billion, but net profit plunged to $2.7 billion, far below expectations, due to a $15.93 billion tax expense linked to U.S. regulatory changes.

Zuckerberg’s warning of even bolder AI investments in 2024 reignited fears about returns on heavy spending. He dismissed concerns about potential overcapacity, arguing excess compute power could enhance core operations or be monetized, similar to rivals Microsoft and Alphabet.

Wall Street analysts expressed caution, with Investing.com’s Jesse Cohen noting, “Meta’s earnings reveal growing tension between massive AI investments and short-term return expectations.” The sentiment shift was evident during the earnings call, where analysts questioned the spending scale.

Separately, Meta plans to issue at least $25 billion in investment-grade bonds, potentially marking one of 2025’s largest debt offerings. Analysts warned that the spending overshadowed robust operational performance. Forrester’s Mike Proulx highlighted Reality Labs’ $4.4 billion operating loss on $470 million revenue, with Q4 sales expected to decline due to seasonal inventory adjustments.