Meta’s Spending Surge Sends Shares Tumbling

Investors in Meta faced a severe market downturn as the technology giant unveiled an aggressive spending roadmap focused heavily on artificial intelligence infrastructure. Despite robust performance in its core advertising division, shareholders reacted negatively to projections of substantially higher capital expenditures through 2026.

The primary catalyst for investor concern emerged not from quarterly results but from Meta's updated capital expenditure guidance. The company revised its 2025 spending expectations upward to a range of $70-72 billion, with further increases anticipated for 2026 that could push expenditures near the $100 billion threshold.

This represents a near-doubling of projected outlays compared to 2024 levels, driven primarily by:
* Substantial investments in AI infrastructure and data center expansion
* Costly cloud computing agreements with third-party providers
* Aggressive recruitment of specialized technical talent

Reality Labs Continues Draining Resources

While Meta's advertising business delivered impressive 26% revenue growth, the company's Reality Labs virtual reality division remained a significant financial drain. The segment reported an operating loss of $4.43 billion during the third quarter against revenue of just $470 million.

Cumulative losses since late 2020 have now exceeded $70 billion, creating unease among even the most steadfast investors. Management anticipates declining revenue in the fourth quarter, citing the absence of new VR product launches planned for 2025.

Should investors sell immediately? Or is it worth buying Meta?

Technical Indicators Reflect Market Anxiety

Meta's share price not only breached critical resistance levels but also broke the upward trend established in recent months. After falling below the 50-day moving average at $690, the equity sought support around the $600 level.

Technical readings revealed deep market uncertainty, with the Relative Strength Index briefly touching 25 - indicating severely oversold conditions. Despite these extreme readings, market sentiment remained predominantly negative.

Zuckerberg's Unwavering AI Commitment

During the earnings presentation, CEO Mark Zuckerberg left no doubt about his strategic direction, emphasizing Meta's continued substantial investment in artificial intelligence regardless of short-term profit implications. "We aren't concerned about building excess capacity," the chief executive stated.

This determined approach has generated apprehension among shareholders. As the advertising business achieves record performance, many investors question when these billion-dollar investments will begin yielding returns.

The company now faces a critical juncture: either demonstrating tangible results from its AI strategy in the near term, or potentially facing further market disapproval. The recent share price decline may represent merely the initial reaction to this ambitious spending program.