Meta Shares Drop on $145B AI Spending Forecast

Meta shares fell sharply after the company projected full-year capital expenditures of $125 billion to $145 billion, well above what analysts had expected. The forecast signals a significant acceleration in Meta's AI infrastructure buildout, covering data centers, servers, and related hardware. The scale of the spending raise is the central concern for investors. When a company of Meta's size commits to that level of capital outlay, it compresses near-term free cash flow, the money left over after a business covers its operating and investment costs. Analysts had modeled lower numbers, so the gap between expectation and reality drove the sell-off. Meta's bet is that heavy AI investment now pays off through better ad targeting, new products, and long-term platform growth. But the market's reaction reflects skepticism about the timeline and return on that spending. Watch for whether Meta's revenue growth in coming quarters justifies the outlay, and whether other big tech firms face similar pressure to match the pace of AI infrastructure spending.