Meta's shares dropped over 12% after a $16 billion tax charge related to Trump's Megabill significantly lowered its quarterly earnings, which otherwise would have exceeded expectations. Despite strong revenue and increased capital expenditure guidance, the tax impact caused the largest single-day loss in years. Meta continues to invest heavily in AI and prepares for future technological shifts.
Meta Platforms reported mixed Q3 results with a significant tax charge impacting earnings, despite a 26% sales increase. The stock fell 7% after hours, ending an eight-day winning streak, though shares are up nearly 28% this year. The company plans to increase capital expenditures, focusing on AI infrastructure.
Meta Projects expects a significant increase in expenses in 2026 due to heavy investments in AI infrastructure, including data centers and talent, despite reporting strong Q3 earnings of $2.71 billion which included a $15.9 billion one-time tax charge. The company aims to balance long-term AI growth with short-term profitability, with revenue projections of $56-$59 billion for the year, while its Reality Labs unit continues to incur substantial losses. Shares declined after the earnings report, reflecting investor concerns over rising costs and delayed returns on AI investments.
Meta's Q3 profit was significantly impacted by a $16 billion one-time tax charge related to U.S. legislation, leading to a drop in shares. Excluding this charge, net income would have surged, and the company plans to increase capital expenditure substantially in 2026 to support its AI and infrastructure growth. Meta continues to leverage its large user base and AI-driven ad platform, while investing heavily in AI development and data centers, despite rising costs and economic uncertainties.
