"Li said during the call that Meta plans to "invest aggressively" in both its own data centers and third-party cloud capacity, with infrastructure costs putting "upward pressure" on capital expenditures. "In the very worst case," Zuckerberg said, Meta would have simply "pre-built for a couple of years," absorbing the extra costs through depreciation while it grows into the added capacity. The greater danger, he said, is "underinvesting" in computing. "We're really trying to build novel capabilities," said Zuckerberg. "This is not like a check-the-box exercise.""
"Meta's third-quarter earnings report did not land well with investors. In after-hours trading, Meta shares tumbled nearly 9% on Wednesday during the investor call. Meta beat Wall Street estimates with a reported revenue of $51.24 billion. However, a $15.9 billion tax charge, an earnings per share that missed expectations, and some concerns over whether Meta's huge investments in AI will translate to profit, weighed down the company's shares."
"1. The cost of 'novel capabilities' Meta CEO Mark Zuckerberg and CFO Susan Li spent a good part of the call discussing the company's soaring AI infrastructure spending. Meta now expects to spend between $70 billion and $72 billion on infrastructure this year, and also expects expenditure growth in 2026 to be "notably larger" than in 2025 as AI workloads continue to rise."
Meta reported $51.24 billion in third-quarter revenue but recorded a $15.9 billion tax charge and reported EPS that missed expectations, contributing to a nearly 9% after-hours share decline. Meta plans aggressive investment in AI infrastructure, expecting to spend $70–$72 billion on infrastructure this year and forecasting larger expenditure growth in 2026 as AI workloads increase. CFO Susan Li highlighted upward pressure on capital expenditures from data-center and third-party cloud investments. CEO Mark Zuckerberg emphasized the risk of underinvesting and described the initiatives as novel capabilities rather than routine projects. Employee compensation is rising and will further affect costs.
Read at Business Insider
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