Saad Ullah
● In a recent post, Chubby♨️ raised doubts about whether Meta's AI bets are actually working, coming right after the company's worst trading session in three years. The stock nosedived 11% on Thursday following Meta's third-quarter earnings call, where stellar financials got buried under worries about exploding AI costs.
● CEO Mark Zuckerberg dropped a bombshell: Meta plans to crank AI capital spending up to $72 billion in 2025. Wall Street's reaction was mixed at best. While Zuckerberg insists these investments are crucial for building AI superintelligence, investors freaked out over the sheer scale. The concerns are real — higher costs, squeezed margins in the near term, and returns that might take years to materialize. Some analysts see echoes of Meta's metaverse gamble, which burned through billions before showing any real results.
● The irony? Meta's Q3 numbers were actually strong. Revenue hit $51.24 billion (up 26% year-over-year) and earnings per share came in at $7.25, beating expectations. But investors fixated on the cash hemorrhage from AI spending. Some are pushing Meta to slow down or tie spending to concrete revenue milestones. Zuckerberg pushed back, claiming Meta's already seeing AI benefits in ad optimization and content recommendations, arguing these investments will "compound returns over time."
● This sell-off fits a broader pattern of tech giants pouring money into AI. Both Alphabet and Microsoft bumped up their spending forecasts this week, but Meta's $72 billion projection dwarfs them all. Short-term sentiment is brutal, but analysts say if Meta executes well, these investments could lock in its position in the next wave of AI infrastructure and digital intelligence.
Saad Ullah
