Shares slipped roughly 3% in premarket trading on October 22 after Meta posted third-quarter results that crystallized a growing tension: the advertising machine is humming, but the AI buildout is now consuming every dollar it generates — and then some.
• Revenue Beat Masks a Cash-Flow Crossover
For the quarter ended September 30, Meta reported $34.91 billion in capital expenditures and negative $2.12 billion in free cash flow, while revenue rose 26% year-over-year to $64.60 billion. That means Meta spent about 54% of its revenue on infrastructure in a single quarter — chips, data centers, and networking gear. Free cash flow swung from a positive $10.6 billion a year ago to negative $2.12 billion , the first time the company has burned cash since going public. Investors rewarded the revenue beat after hours, pushing shares to $704.15 , but by premarket Thursday the stock had reversed to roughly $677.76, down 2.83% .
• The Capex Floor Keeps Rising
Meta raised the low end of its 2026 capital spending forecast by $5 billion to $135 billion, bringing the full range to $135–$145 billion. For context, full-year 2025 capex was $72.2 billion — meaning this year's spending could nearly double. Analyst commentary noted the guidance implies as much as $59 billion in capex in Q4 alone. Each upward revision tests investors' patience: how long can profits grow while the company pours cash into AI infrastructure at this pace?
• A $9.9 Billion Legal Bill Clouds the Picture Further
Meta took a $9.9 billion charge related to legal proceedings in Q3 , stemming from a settlement with 52 state attorneys general over teen mental-health litigation, with payments of up to roughly $18.59 billion.
Total costs jumped 68% to $51.61 billion, and operating income fell 37% to $12.99 billion.
• A New Share Class Hints at Future Fundraising
Meta also plans to introduce non-voting Class C shares, distributed as a stock dividend — effectively a 2-for-1 split — expected to begin trading in January.
The company may later issue Class C shares to raise capital, compensate employees, or fund acquisitions , giving it a financing tool that preserves CEO Mark Zuckerberg's voting control. For shareholders, this is both a liquidity sweetener and a signal that Meta's cash appetite may outlast its cash generation for some time.