### Meta's Stock Plummets Amidst High AI Spending Concerns Meta Platforms Inc. has recently faced significant stock declines despite reporting strong third-quarter earnings. The company's aggressive plans for increased spending on artificial intelligence (AI) and virtual reality (VR) projects have raised concerns among investors, leading to a notable drop in stock prices. Analysts have reacted by adjusting their price targets downward, reflecting a cautious outlook on Meta's financial trajectory as it navigates soaring operational costs. ### Breakdown of the Current Situation 1. **Earnings Report Overview**: - Meta reported Q3 earnings with revenue of **$51.2 billion**, a **26% increase** year-over-year, but earnings per share (EPS) of **$1.05** fell short of the expected **$6.72** due to a one-time tax charge [https://coincentral.com/meta-stock-why-shares-dropped-8-after-earnings-beat]. - The operating margin decreased from **43% to 40%**, attributed to rising AI-related costs outpacing revenue growth [https://coincentral.com/meta-stock-why-shares-dropped-8-after-earnings-beat]. 2. **Stock Market Reaction**: - Following the earnings announcement, Meta's stock dropped by more than **10%** on October 30, 2025, as analysts expressed concerns over the company's **$71 billion** capital expenditure guidance for 2025, which is significantly higher than previous estimates [https://finance.yahoo.com/news/meta-stock-plunges-more-than-10-as-analysts-cut-price-targets-on-sky-high-ai-spending-170405940.html]. - The stock continued to slide in after-hours trading, reflecting investor apprehension about the sustainability of Meta's growth amidst escalating costs [https://stocktwits.com/news-articles/markets/equity/meta-stock-sinks-after-hours-as-16-b-tax-provision-hits-q3-profit/cLGFOylR3D7]. 3. **Analyst Sentiment**: - Analysts have begun to cut their price targets for Meta, highlighting a growing uncertainty regarding the company's ambitious AI spending plans [https://stocktwits.com/news-articles/markets/equity/meta-stock-dips-pre-market-after-wall-street-turns-cautious-on-tech-giant-s-soaring-ai-spending/cLGFsTaR3xc]. - Benchmark's rating cut reflects this cautious sentiment, emphasizing the need for Meta to balance its investments with profitability [https://stocktwits.com/news-articles/markets/equity/meta-stock-dips-pre-market-after-wall-street-turns-cautious-on-tech-giant-s-soaring-ai-spending/cLGFsTaR3xc]. ### Supporting Evidence and Data - **Financial Metrics**: - **Q3 Revenue**: $51.2 billion (up 26% YoY) [https://coincentral.com/meta-stock-why-shares-dropped-8-after-earnings-beat]. - **EPS**: $1.05 (missed estimate of $6.72) [https://coincentral.com/meta-stock-why-shares-dropped-8-after-earnings-beat]. - **Operating Margin**: Dropped to 40% from 43% [https://coincentral.com/meta-stock-why-shares-dropped-8-after-earnings-beat]. - **2025 Capital Expenditure Guidance**: Increased to $71 billion [https://finance.yahoo.com/news/meta-stock-plunges-more-than-10-as-analysts-cut-price-targets-on-sky-high-ai-spending-170405940.html]. - **Stock Performance**: - Stock dropped over **10%** on October 30, 2025, following the earnings report [https://finance.yahoo.com/news/meta-stock-plunges-more-than-10-as-analysts-cut-price-targets-on-sky-high-ai-spending-170405940.html]. - After-hours trading showed continued declines, indicating persistent investor concerns [https://stocktwits.com/news-articles/markets/equity/meta-stock-sinks-after-hours-as-16-b-tax-provision-hits-q3-profit/cLGFOylR3D7]. ### Conclusion: Navigating a Challenging Landscape In summary, **Meta's stock has faced significant declines** following its Q3 earnings report, primarily due to concerns over its **aggressive AI spending plans** and a substantial increase in capital expenditures. The company's strong revenue growth contrasts sharply with its rising costs, leading to a cautious outlook from analysts and investors alike. 1. **Earnings Performance**: Meta reported strong revenue but missed EPS expectations due to a tax charge. 2. **Stock Market Reaction**: The stock dropped significantly as analysts adjusted their price targets downward. 3. **Future Outlook**: Investors are wary of the sustainability of Meta's growth amidst rising operational costs. As Meta continues to invest heavily in AI and VR, it will need to demonstrate that these expenditures can translate into long-term profitability to regain investor confidence [https://coincentral.com/meta-stock-why-shares-dropped-8-after-earnings-beat].