Mark Zuckerberg 's Meta Platforms warned of "notably larger" capital expenditures in 2026 as it ramps up artificial intelligence investments, including a massive buildout of data centers to fuel its pursuit of superintelligence. The announcement overshadowed a strong third-quarter performance, sending shares down 8% in after-hours trading. The parent company of Facebook and Instagram reported third-quarter revenue growth of 26%, surpassing Wall Street estimates. However, costs surged 32% in the same period, outpacing revenue gains and highlighting the financial strain of Meta's AI push.A one-time charge of nearly $16 billion tied to U.S. President Donald Trump's 'Big Beautiful Bill' crushed reported net income to $2.71 billion. Excluding the item, adjusted net income would have risen to $18.64 billion.
Meta shares , up 28% year-to-date, tumbled as investors grappled with CEO Mark Zuckerberg's aggressive plans to expand AI data center capacity, which analysts say will pressure profit margins. The spending surge has rattled investors. "Meta's earnings reveal the growing tension between the company's massive AI infrastructure investments and investor expectations for near-term returns," said Jesse Cohen, senior analyst at Investing.com, as quoted by Reuters. "Rising spending on artificial intelligence capabilities is weighing on sentiment despite solid underlying business performance," Cohen added.
Mark Zuckerberg's Big Bet on Superintelligence
After lagging rivals early in the AI race, Meta has committed hundreds of billions of dollars to construct several enormous data centers aimed at achieving superintelligence --a hypothetical point where machines surpass human cognition. "There's a range of timelines for when people think that we're going to get superintelligence," Zuckerberg told analysts on a conference call. "I think that it's the right strategy to aggressively front-load building capacity, so that way we're prepared for the most optimistic cases.
"He added that excess compute could bolster Meta's core advertising business if superintelligence timelines stretch longer than anticipated. In a worst-case scenario, the company would pause new infrastructure builds temporarily. Meta raised the low end of its 2025 capital expenditure guidance to $70 billion–$72 billion, up from a prior range of $66 billion–$72 billion.
Meta's AI hiring frenzy
To close the gap with competitors like Microsoft and Alphabet's Google, Meta reorganized its AI operations under a new "Superintelligence Labs" unit in June. Zuckerberg has spearheaded a talent recruitment blitz, positioning Meta as a top purchaser of Nvidia's high-demand AI chips."Meta Superintelligence Labs is off to a a strong start," Zuckerberg said. "I think that we've already built the lab with the highest talent density in the industry... We're also building what we expect to be an industry-leading amount of compute."Chief Financial Officer Susan Li noted that employee compensation—driven by 2025 hires, especially in AI—will be the second-largest driver of next year's cost increases.
The frenzy extends beyond Meta. Construction of AI data centers by Meta, Microsoft, Google, Amazon, and OpenAI has exploded, stoking bubble fears amid multibillion-dollar costs. On Wednesday, Alphabet and Microsoft also flagged higher AI spending. OpenAI CEO Sam Altman said Tuesday he envisions adding 1 gigawatt of compute weekly—a feat that could cost over $40 billion per gigawatt at current rates.
Meta shares , up 28% year-to-date, tumbled as investors grappled with CEO Mark Zuckerberg's aggressive plans to expand AI data center capacity, which analysts say will pressure profit margins. The spending surge has rattled investors. "Meta's earnings reveal the growing tension between the company's massive AI infrastructure investments and investor expectations for near-term returns," said Jesse Cohen, senior analyst at Investing.com, as quoted by Reuters. "Rising spending on artificial intelligence capabilities is weighing on sentiment despite solid underlying business performance," Cohen added.
Mark Zuckerberg's Big Bet on Superintelligence
After lagging rivals early in the AI race, Meta has committed hundreds of billions of dollars to construct several enormous data centers aimed at achieving superintelligence --a hypothetical point where machines surpass human cognition. "There's a range of timelines for when people think that we're going to get superintelligence," Zuckerberg told analysts on a conference call. "I think that it's the right strategy to aggressively front-load building capacity, so that way we're prepared for the most optimistic cases.
"He added that excess compute could bolster Meta's core advertising business if superintelligence timelines stretch longer than anticipated. In a worst-case scenario, the company would pause new infrastructure builds temporarily. Meta raised the low end of its 2025 capital expenditure guidance to $70 billion–$72 billion, up from a prior range of $66 billion–$72 billion.
Meta's AI hiring frenzy
To close the gap with competitors like Microsoft and Alphabet's Google, Meta reorganized its AI operations under a new "Superintelligence Labs" unit in June. Zuckerberg has spearheaded a talent recruitment blitz, positioning Meta as a top purchaser of Nvidia's high-demand AI chips."Meta Superintelligence Labs is off to a a strong start," Zuckerberg said. "I think that we've already built the lab with the highest talent density in the industry... We're also building what we expect to be an industry-leading amount of compute."Chief Financial Officer Susan Li noted that employee compensation—driven by 2025 hires, especially in AI—will be the second-largest driver of next year's cost increases.
The frenzy extends beyond Meta. Construction of AI data centers by Meta, Microsoft, Google, Amazon, and OpenAI has exploded, stoking bubble fears amid multibillion-dollar costs. On Wednesday, Alphabet and Microsoft also flagged higher AI spending. OpenAI CEO Sam Altman said Tuesday he envisions adding 1 gigawatt of compute weekly—a feat that could cost over $40 billion per gigawatt at current rates.
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