Meta stock drops 12% as heightened AI spending overshadows strong third-quarter results (www.cnbc.com)

Meta’s stock plunged about 12% after the company raised its 2025 capital-expenditure guidance, a move that overshadowed otherwise strong third-quarter results. Meta reported adjusted EPS of $7.25 on $51.24 billion in revenue, a 26% year‑over‑year rise, but told investors it now expects 2025 capex of $70–72 billion (up from a prior $66–72B range). CEO Mark Zuckerberg defended the bump, saying Meta is already seeing returns in its core ads business while “aggressively” building capacity to prepare for a future “superintelligence.” The quarter also included a $15.93 billion tax charge tied to recent legislation, and Meta announced new cloud deals to expand its AI infrastructure. The announcement matters because it underscores how the AI compute arms race is reshaping capital allocation across Big Tech: Alphabet has lifted its capex to $91–93 billion and Microsoft also signaled higher spending, highlighting growing demand for datacenter capacity, GPUs and bandwidth. For the AI/ML community, heavier capex means faster deployment of large-model training and inference infrastructure, more cloud partnerships, and intensified competition for chip supply chains — accelerating model scale and services but pressuring near-term margins and investor sentiment. Meta’s stance signals a strategic bet that front-loaded infrastructure investment will pay off as AI-driven products and generational models become core revenue drivers.