Meta shares fall 6% as AI spending drives negative free cash flow
Third-quarter revenue beat estimates at $64.6 billion, but Meta raised the low end of its 2026 capex guidance to $135 billion.
Meta shares fell about 6% on October 22 after the company reported negative free cash flow of $2.12 billion for the third quarter and lifted the low end of its annual capital expenditure guidance, according to CNBC.
The company now expects 2026 capital expenditure of $135 billion to $145 billion, up from a previous range of $130 billion to $145 billion. The spending is tied to Meta's AI buildout.
Revenue for the quarter was $64.6 billion, up 26% year on year and above the $63.37 billion market estimate. Earnings per share came in at $3.83.
Meta's five-year credit default swap spread rose to an all-time high on the same day, a market measure of the cost of insuring against a default on the company's debt.
New share class and a California tax warning
Meta said it will create a new non-voting Class C common stock. In an SEC filing, the company also said that if the California wealth tax passes, CEO Mark Zuckerberg could owe billions of dollars in taxes tied to his company stock holdings.
Quick answers
Why did Meta stock fall on October 22?
Shares fell about 6% after Meta reported negative third-quarter free cash flow of $2.12 billion and raised the low end of its annual capital expenditure guidance.
What is Meta's capital expenditure guidance for 2026?
Meta raised the low end of its range to $135 billion to $145 billion, from $130 billion to $145 billion.
What were Meta's third-quarter revenue and earnings per share?
Revenue was $64.6 billion, up 26% year on year, with earnings per share of $3.83.